3 takeaways from the conversation with Karl Andersson

1. From observation to innovation

Matsmart was born from witnessing the problem of food waste firsthand in a supermarket and figuring out a way to save perfectly good food from being thrown away. They created a unique business by offering discounted prices on food items close to their best-before dates, which appeals to both environmentally conscious consumers and those looking to save money.

2. Building a community-driven brand

Matsmart has grown by building a strong connection with its customers. They’ve used fun and engaging marketing strategies to encourage people to join their mission against food waste. By sharing their journey and involving customers in their story, they’ve built a loyal community that supports their cause and spreads the word.

3. Prioritizing sustainable growth:

In recent times, Matsmart has shifted its focus toward achieving profitability, ensuring that it can sustain its business without constant external funding. This shift doesn’t mean they’ve stopped growing; it means they are growing more sustainably. They are optimizing their operations, like introducing warehouse automation, to improve efficiency and reduce costs, which is crucial for their long-term success.

Watch episode: From 0 to 100 million euro with Matsmart co-founder Karl Andersson

From 0 to 100 million euro with Matsmart co-founder Karl Andersson – Youtube transcript

[00:00:00] The Growth Pod is brought to you by Genero, a leading growth agency in the Nordics. We interview marketing experts, business leaders, and entrepreneurs to uncover the stories and strategies behind profitable growth.

This is a conversation with Carl Andersson, co founder of online grocery store ModSmart. ModSmart has helped save over 60, 000 tons of food and consumer products from going to waste, by instead selling them directly to consumers at big discounts. The company was founded in 2014 and has grown rapidly to over 100 million euros in revenue across five markets in Europe.

We talked about raising over 200 million euros in funding, trends in the food e commerce space, marketing, advertising, international expansion, and a lot more. Please enjoy this [00:01:00] conversation with Gautam Anderson.

It’s been, um, it’s been a pretty wild year, um, last year for you. Um, you ended the news or kind of ended with, with news in November that you closed a funding run. I think it was 40 million euros. Yeah. And. If I read correctly, if I, um, the valuation did not change from the previous funding round, is that disclosed or is that, is that the case?

That’s exactly, uh, that’s how you should read it. I mean, I would say that we kind of pretty much did a flat round. Yeah, it was a crazy ride, right? We had, we actually had a lot of interest around the company and so on, but there is always, you know, it’s always this, uh, yeah, it was a very, very crazy. Weird year last year, so a lot of uncertainties and so on, but we.

You know, we have really good investors on board already that supports the [00:02:00] company really, really well, and we’re really happy to have them on. Uh, and, but, and also now it’s a fantastic, add on to add on circularity to that crowd, uh, given that, uh, you know, they are that impact investor that you’re looking for, and also that they are very keen on, on, on supporting us and scaling this company.

So I was. Yeah, it’s incredible.

I mean, you mentioned circumstances where conditions, market conditions were really tough and to be able to raise that kind of money and at a flat valuation, I think is very incredible. Um, so definitely want to talk a little bit about fundraising cause you’ve done a lot of it and, and some of the lessons learned, but first let’s, let’s start with, uh, with ModSmart.

Where did the idea come from? Because your background, if I read it correctly, it’s mostly in sales. Working different, different types of sales roles. And this is obviously, it seems like a very, very different kind of thing. So, so where did the idea come from? Um, that led you to [00:03:00] start co found ModSmart 10 years ago.

You’re right. I mean, I’ll be working with sales servers since I left school, basically. Yeah. And, um, uh, you know, being sales manager and sales director and having different roles within media and other companies, and I also run. Uh, before ModSmart, I, I, um, have had a couple of ventures before this one. So, um, when, um, yeah, I mean, ModSmart is a, it’s a fantastic story, right?

Because it’s a friend from, uh, where I used to grow up. So to tell you just, you know, 30 50 minutes outside of Stockholm. Um, who owns a supermarket store, Eric. Yeah. And, uh, you know, he’s seeing everyday good things going to waste. Getting super frustrated about all of this. And, uh, you know, when people come up to him in the store saying like, uh, hey, I, How can you sell this pasta?

[00:04:00] It’s, you know, it’s best before date is only like a week left. Or I mean, how can you even sell this in the store? You know, and then Eric, you know, came to discuss with them and say like, but when are you going to eat this? And what do you think will happen to this pasta after a week? And they said like, yeah, but I’m, this is something I will eat, of course, tonight.

Uh, then I don’t understand these conversations. And this was back in 2013, 14 something ish. Um, and, uh, you know, when Eric had one of his suppliers come on, coming up to him and said, you know, I have a problem with this short dated good. Uh, that being a Christmas soda and no one wants to buy it anymore.

Could you please help me out a bit? Eric said, like, you know what, I’m happy to help you. Um, I, I will buy everything you have. I would only pay you a third of what you’re asking. So that’s how it started. So they tried that, you know, [00:05:00] Christmas sold out and this now was in springtime, so everything was a bit weird, right?

Selling Christmas, sold springtime. So his customers came up to him and you know, instead of complaining, you know, how could he sell things? He just had a week left. They said like. Wow, it’s amazing that you sell Christmas soda in May, um, fantastic. So, uh, that gave Eric a lot of confidence. So, uh, you know, he, he tried out others, uh, you know, he, uh, challenging goods.

He, he started to, to speak to all his, um, suppliers if they had any problems and so on and so forth. And, um, After a few months, he had a store with all of this exciting assortment and, uh, you know, a really cool thing was that the, the frequency to the store really picked up. So people came in through the door just to see what’s on sale.

You know, what kind of weird assortment do Eric have today? So that became, [00:06:00] you know, something really good. Um, yeah, on the flip side to that, I guess, um, the Normal assortment didn’t get touched. So that was one problem and uh, the the average order value So he said to himself, okay, this is a good idea. The challenging thing is though that the, the, uh, it doesn’t really fit, uh, in my store.

Um, um, yeah, so he gave me a call and we. And we sat down to discuss it. I brought in my friend Uffe. And the three of us kind of, you know, started to look and, you know, twist and turn this idea around. And we realized very quickly that this was such a big problem. It was a massive problem with this food waste.

Not something that was, you know, local to Eric’s store. So that was the first thing we saw. The second thing we saw was that, you know, the frequency that Eric kind of noticed in the store selling, you know, off price goods, [00:07:00] um, that we saw all over, right? You see it in Black Friday, Cyber Monday, and so on, and all other outlets, I guess.

So we said that, okay, that’s also very interesting, and two, that, uh, we saw that food online was about to happen in Ocado and all others. So combining these three, yeah, uh, yeah, made this into a really, really interesting, uh, business idea. So we decided to do that. We decided to only sell dry goods, and use third party logistics, and in that way be able to reach the full length of the country.

Um, and also the full length of, of the Nordics. Right. Um, so, um, that was a few dec uh, decisions that we took on that. Yeah, I guess, uh, a few. I think it took us like eight weeks or something like that to, to get going. And in January, uh, 2014 we [00:08:00] launched a site. Uh, so, so I guess that’s how it came about.

Amazing.

Um, it really started from observing a problem and then coming up with a solution. First, could we put some numbers on that? Because you hear a lot about food waste and how much is, is being thrown out at different parts of like the, the value chain, but what are we talking about here? And how much has you got, how much have you guys been able to kind of save?

Uh by by being able to sell these products that otherwise would have been

thrown out I mean one needs to understand that this is a massive problem And you know now having learned some about it I I say that you know, this is probably one of our time’s biggest issues if we don’t Solve the problem with food waste, we will never be able to face or the climate changes that we’re facing, right?

Um, so, so one third of everything being produced is actually being thrown away. So [00:09:00] that’s how big this problem is. And, uh, throwing in a few more numbers in there, I think we’ve saved more than 60, 000 tons of food somewhere around there. Uh, and that’s of course a massive number, I think. Um, yeah, I mean, we turned Something that, you know, no one wanted to look at into a venture that, that now sells food every day and turns roughly around, what, 1 billion CX or 100 million euros.

even more than that. Uh, so of course, uh, I, I think, you know, the food industry is such a big one. Uh, on the, um, uh, we expect the, you know, our store, the physical store to look exactly the same. Regardless of, of, of, of the time of, of, of year it is, right? So, uh, [00:10:00] that of course creates a lot of pressures on the, um, producers, suppliers.

I mean, these wheels, they really need to keep turning on the, um, yeah, that’s also why these numbers are so huge. Yeah.

I’ve thought about that. Just going into, you know, supermarket in the middle of winter throughout the year and find these perfect bananas. And all these, you know, this shelf of perfect bananas.

And when you think about just a logistical nightmare or that is required to deliver that experience every day. Like you said, you understand that there’s got to be a lot of waste in the process. A lot of added costs. Um, you mentioned that you kind of were able to turn this thing that, that, uh, no one wanted to look at into this, this really now successful established thing.

What was it like in the beginning? Did, did customers understand? What, what you were about, did they, was it, you know, immediate traction or did you have to go through this process of educating people [00:11:00] about, like you said, expiry dates of what kind of food you can eat when, and, and things like that, how, how did that process look like?

Yeah, it’s interesting. Thanks. So, I mean, first of all, we created a new category. Um, you know, selling something that no one sold previously, of course, you know, you can see off prices in the stores as a whole, but not only zooming in on that niche. So that we were very, very alone on. So that was the first thing.

And when we launched the site, we didn’t know how much green we could say that we were. Would people really buy old food? Because when you started to talk to people about the idea, I mean, just a correction, we don’t sell old food, but we do sell, you know, food that has some kind of challenge or close to its best forward date or, you know, but when we nowadays talk about close to its best before date, [00:12:00] has roughly around 30 days left.

So 3 0, so it’s a lot of days, right, to consume that good that you buy from us. Anyways, so in the beginning it was very hard for us to know how green could we say that we were. So we started to say that we were kind of green, and or ish green, or ish saving the world, something. Uh, and the cool thing was that the customers really supported us in, in, in that transformation from, From just saying that we were doing something good to that we were saving the world because they kind of everything they bought from us.

They photo it and they picture it. They published those pictures on Instagram and Facebook and where not. And they were like. I’m saving the world. So they were, uh, they were very much like, uh, they, they were doing this together with this company and they were bragging about it. So that was actually the best thing that could happen for us.

And it gave us [00:13:00] a lot of confidence and courage to say that, yeah, we are an impact company. We do this. We have a mission to, to change the world. And, uh, yeah, and, and, and, uh, it has been a happy collaboration since then with our customers, I guess. Very cool.

So you kind of, at the very beginning, you found these, the, the early adopters, the ones who really care about the impact.

Yeah. And now I guess you, you’ve been part of growing this category to the point where, um, I, I, I suppose it’s a lot more broad. Can you talk a little bit about like the, what does the user kind of customer behavior look like? Do you have a small group of power users that are just buying? You know, almost shopping exclusively, at least dry goods from you guys.

Or is it just a lot of people buying quite infrequently? What, what does that kind of kind of look like? And is it different from like a traditional grocery store,

if you will? I mean, we have something completely different, right, because what we offer on a Tuesday, we [00:14:00] can’t offer the same assortment on a Thursday, given that, uh, we sell the thing, you know, the things that we found, find, um, at that moment.

And given that we have so good prices and limited volumes, we sell out very, very quickly. So that’s the first thing, right? And, um, uh, To this, I, I, I, I also would say that, uh, we, um, it’s, we have a very wide range of customers. So on one end, we have the ones that buys from us simply because they want to save the world.

And on the far end of that spectra, we have the, you know, the ones that buys from us simply because they want to save their wallet or, you know, they’re on a budget. And smack in the middle, we have the family on a budget, I guess. Right? Uh, so that’s very much how it is. And then these [00:15:00] customers, customer group that we have, have different kind of behaviors.

And a lot of these customers go in more or less, you know, weekly, daily, just to see what’s on sale. Can I, you know, does this fit my normal shopping routine or my, my, my normal basket and so on? Yes, now they have my cereals and they have my Coca Cola. Okay, let’s go for it. Now I’ll finish my, my order and check out.

So that’s very much how it works, very opportunistic. Then you also have the even more loyal group that only buys, you know, their pasta and rice and so on and so forth. From us. Um, the, they, how should I say? I mean, they, they, they come back every month and they do this kind of purchase or even more frequently actually.

Uh, so I, I guess those are, are, are the kind of needs we, we of course serve. [00:16:00] Um, if I should add anything to that, I, you know, they are the ones that maybe stock up even more, you know, they, they buy a few times a year and they really stock up. So, uh, you also have that mags.

Yes, it’s really across the board and it makes sense because the business model is such a win win.

It’s good for the wallet, it’s good for the planet, and it’s good for you. Just to make sure I understand, are you buying most of these products from producers or from the retailers? Where, where does it come from?

Yeah, sorry, I should have been more clear about that. So everything that we buy is from producers or manufacturers, um, across, um, um, um, yeah.

So, so the biggest suppliers you can even imagine, I mean, Unilever, Nestle, Coca Cola, all of these guys, right. And also, of course, a lot of the smaller ones we also buy from. Right. Yeah. Not from any stores.

Got it. Has any store, uh, whether it’s like Ica in Sweden or, or Gaskor, um, [00:17:00] the S group here in Finland, has any store kind of ventured into this kind of, um, offered something similar to what you guys are doing in any of the markets that you’re in?

I mean, they of course sell things that they have a problem with and they, you know, they have a lot of own assortment these days. So you can, you know, I think especially the times we’re in, you can see in the stores that they have a lot of more kind of. Special offerings and so on. So absolutely, but not in the focused, uh, niched way that we do it.

No, we haven’t seen that.

I’m guessing that focus in that, that you’re taking that really, really narrow approach helps when it comes to building, building the brand top of mind awareness in the category. And, um, yeah, let’s, let’s talk a little bit about kind of the messaging and the creative that you have.

You’ve had, I don’t know if you’re running this right now, but at least in the past, you’ve had these TV commercials. That are very, um, like they’re almost jarring. Like they’re so [00:18:00] striking. And so, um, maybe I’ll put some, some links to it in the show notes, but can you talk about what led you to kind of come up with that very, shall we say, provocative, uh, creative strategy around, around the

messaging?

It’s a development, right, to go, uh, we, we started somewhere not to talk, we didn’t know how, how much to talk, how much we could talk about it, but, and to, that we do this together with our customers, and I think that that journey has always been, we’ve been, we love this, we, we love selling, saving, selling food, we love it, we think it’s just, you know, the best thing in the world, right, and we let that show, so we invite the customers, you know, In the beginning, we, we, every time we got, uh, I don’t know, a special kind of good song for sale, we, you know, we, we did, uh, our own kind of, uh, uh, movie with, uh, with the iPhone saying, you know what, right now we have crazy [00:19:00] deals on this chocolate bar, yada, yada, yada.

And, uh, we did something cool around that and, and, and just posted it. Uh, so we have always have this, um, I don’t know, uh, fun thing to it. We want it to be fun. And if, you know, uh, we also, we, we, in the beginning, we spoke a lot about, you know, let’s save the world and good prices and that that tri triangle has, that, those base of, of that triangle has always been important.

But then we wanted the fun part of that to be a triangle and. In the beginning, we did a lot of these kind of marketing and brand building by ourselves. But then we, I mean, very early on, we decided that we wanted to go international. And then we needed to have like a bigger brand, a brand that said a bit more, that have a Um, yeah, hi, [00:20:00] more body to it, I guess, and more story to it.

So we, we started to, to meet different kind of, uh, Uh, advertising agencies and so on, and we ended up working with TBWA on the, they really supported us in building this international brand and, you know, them have, have kind of found or navigated that, uh, journey together with us and, and, and really came to the point where, you know, it should be fun.

we shouldn’t have any. You know, pointers or we shouldn’t be bashing everyone if they don’t, if they are not doing everything right. We should rather be invited everyone to join the fight against food waste and, you know, being kind of rebellic about that. So, so that has very much been what we’re trying to look for.

Um, You know, I, you [00:21:00] know, the big problems, complex problems, um, package them in, in something that is fun, um, invited, I guess.

Yeah. I was looking through the, your ad library on meta, uh, you’re running a ton of, ton of ads there and, and, um, a lot of very, very kind of, uh, some weird ones as well, but central around this idea that there’s nothing more stupid than wasting good food.

And I definitely could pick up on, on this. Not taking yourselves too seriously and wanting to have fun with this, like you said, complex problem presented in a way that everyone can participate. So it seems like that strategy has really paid off for you guys and allowed you to speak to very, very

broadly.

Yeah, I mean, if you look, it’s very hard these days to do something good for the environment. It’s both expensive and hard and most of all, really boring. I mean, maybe the, the fund, the other fund companies maybe would be to drive an old Tesla, but not [00:22:00] everyone can do that. Right? Uh, so, uh, that has been made very much our starting point that like, it shouldn’t be that hard.

It shouldn’t be that complicated, and it should be, um, yeah, it shouldn’t be boring. It shouldn’t be fun doing shit like that. I mean, that’s very much how, how, how we, we started to think about it. Um, yeah,

I think that really, really shines through in the, in, in the messaging there. Is there anything in terms of, you know, channels or, or tactics or tools that has been particularly effective for you when it comes to just driving signups, getting new people to try the service?

Or is it just a matter of getting the word out there, trying different media, media

placements? Yeah, we, we, we, we have tried everything. Of course, we’ve tried Facebook, Instagram, Google, you know, uh, TV and radio and all of that, right? Um, [00:23:00] the thing that was most, the, the, the absolute best channel for us in the beginning was of course, Facebook, because it was so easy for us to invite others to join in.

So that was, we really liked that format, um, and, uh, every, in the first year, I think every Friday we, we had a really long blog post saying like, this, this has happened this week. We’re so excited. Yada, yada, yada. And, um, yeah, and, and it got so many likes and everyone loved it and so on. So we went to this, um, Uh, some special, you know, specialists and agencies and good Google advertising and Facebook and so on.

And they, uh, we asked them, you know, what do you think? I mean, please advise us here. We don’t know shit about this. Um, you know, please help us. And they, they said like, first of all, you really need to [00:24:00] stop doing all of this writing and these long posts. That’s just stupid. Please stop doing that. And then we will start thinking about what you could do instead.

So we stopped doing that. And the funny thing was that the customers reached out and they say, Hey, where are you guys? We want to hear more. What happened this week and and so on so yeah We never we never we haven’t stopped We have changed it of course a bit now But we kept on kind of telling the story and we know how our customers really like that So, um, we also have used that in other channels.

So, I mean, PR has been a very, very important part of our mix. Um, maybe not so every thought through or, you know, we’ve been very in. Um, adventures in, into that channel or, or way of [00:25:00] communicating. So if we’ve got any new suppliers on, we told a story about that. If we, um, if, you know, did an error on the site or if something went down, we told a story around that, you know, what happened.

And, uh, and, and we got really lucky to get a lot of publications around that. And, and, um, Uh, yeah, that of course gave us confidence to continue doing that. So we have been using PR a lot, uh, and also try to be very honest about our journey.

I think that’s so interesting because what you’re saying is you just kept on communicating and sharing what was happening.

And I think that that is so underutilized by so many businesses. Is that we get so accustomed to, to what we’re doing that we think that everyone knows about it or everyone does, no one wants to hear about it, but if you’re constantly just giving people, um, especially in the beginning, as you have [00:26:00] these, you know, this early, this, this customer base of, um, early adopters who are really actually interested in what you’re doing because they’re actively contributing.

Um, and, and then it’s just about figuring out like the different, the different media and, and different channels and maybe the creative strategy around it. But the core idea of let’s be really active in telling, telling our story and what’s happening, I think that’s really, really important. Uh, really powerful.

Yeah. Yeah, and I I I very much believe in, you know, to be a bit I mean as transparent as you can be And maybe not too thought through every time more kind of playing around with it and inviting others to be part of your company Or your venture. I think that is something that is very powerful And yeah, it’s almost that they are also running the business in some way

Are you measuring because a lot of this is is about?

Getting that top of mind awareness and also expanding the category Are you measuring [00:27:00] that kind of brand awareness or are you mostly paying attention to? Um to the revenue customer acquisition costs things of that

nature No, I mean, we’re of course measuring, you know, the brand awareness. I don’t I i’m not on top of all numbers I know that we have more than 70 Our brand awareness in sweden that I know Uh, I think it’s all 30 or, uh, I, I, I shouldn’t throw any more numbers in there, but I know that this is something that we’re following every day and it’s very important, but there are others these days looking into those numbers.

It’s something I see month by month more or less is this

70 percent in, in your home market. That’s very incredible. And we talked about like. That’s 7 million Swedes or something like that. That’s crazy. Yeah, it’s, um, okay. And you’ve now you’re in five countries, I think. So the Nordics plus Germany or, uh, Germany plus Austria,

maybe.

Exactly. Germany, Austria, uh, [00:28:00] Germany, Austria, Sweden, Finland, Denmark. Exactly.

Got it. What was that like going with, uh, which country was the first one? After Sweden, was that which, which did you go to Denmark?

No, we went Norway. Yeah.

So tell me about

that. Yeah, no, exactly. We, we, we kind of said to ourselves, it’s so much more expensive with food in Norway, right?

So why not Norway? Let’s start somewhere. And we always. Decide, and I always knew that we were to expand and show that this is not something that is a Swedish thing. It’s something more than that, and we wanted to try out the new market. So we did a very kind of bootstrapped expansion to Norway. Um, that we opened it up like a border shopping thing.

And then we got so much traction, so we want, we needed to ship in all the way into Norway and [00:29:00] realized fairly quickly that this was really expensive, given that, you know, they have sugar tax and they have a lot of other penalty taxes if you’re not kind of producing things in Norway. So we, we kind of stepped away from that very, very quickly.

But then we stepped into Finland, uh, and that was really interesting, and, and, and, uh, has been a very good, uh, learning for us. Uh, and the important thing after that was, we wanted to show that this is something, it’s not a nor it’s not a Nordic thing. This is something that is more than that. We believe that this is, of course, a European opportunity.

And even more so a global opportunity. And, uh, by saying that we want, we needed to take actions, right? And the first thing was to, to say, okay, what countries should we then be in? I mean, we should probably be in, in, in the biggest food markets. And two of them, we kind of zoomed in on was of course, Germany and [00:30:00] the UK.

And every investor we spoke to and took advice from that, you know, because we of course needed some capital to move into these markets, so that whatever you do, don’t go into Germany, because they will hammer you, they will not leave you. And let you out alive on the, uh, so, uh, but why don’t you, you know, have your eyes more towards, uh, I don’t know.

I mean, Holland, the Netherlands, somewhere around there. I mean, those guys, they look like you, they think like you, they talk almost like you look towards them. And you know, that made us think like, okay, so that would then mean if we succeed there. They will still say that we haven’t really succeeded in any major market.

So we said to ourselves, I mean, the biggest and most fierce market [00:31:00] in Europe would be Germany. So, you know, let’s, let’s just go in there. So, um, we put all our bets on one card and, and, uh, yeah, we, we stumbled our way in there. Um, the. Found a really, really strong team and great investors and yeah, it was a success.

It took some weeks to figure out the market or crack the market, of course, or crack the market. Please withdraw that. But, you know, start to understand that what we were doing at least, uh, on them, uh, after doing that and getting the first suppliers on. Uh, I’m getting the, you know, the four first orders out and getting Google to work.

We, uh, yeah, we had a liftoff on, uh, that was really, really strong. Um, and now we, I mean, um, the German markets is, uh, will soon kind of, uh, say, [00:32:00] Oh, be bigger than the Swedish market. So, um, yeah, we’re really, really happy about that

launch. That’s incredible. I very kind of courageous like you said placing everything putting everything on that one one bet, but I’m guessing You kind of thinking was if we’re able to validate that this works in Germany, then the value of the company, um, increases substantially because right now it’s, it creates a lot bigger opportunity.

Um, I know, I mean, Germany is very different from Sweden in terms of, for instance, just, you know, e commerce, uh, online shopping behavior and things of that nature. So was there anything you had to adapt when you went to Germany or did you kind of take the Swedish playbook and look, they translated just into, into German and, and.

No, but you’re, you’re on to something here. I mean, it’s of course, you know, millions adjustments, right? Millions, uh, small and tiny bits and just how you communicate them. Uh, I mean, so, so there have been so many [00:33:00] small adjustments, but if you. Look at it as a, in a broader perspective and really zoom out.

Yeah, we have the same business in Germany as we have in Sweden. We, we buy the same things, the offerings are kind of the same. Um, the communication are, you know, a bit tweaked, but yeah, we’re, we’re, we’re almost kind of saying the exact same using the more or less the same ads. So, um, I, I think it’s a, a clear proof that this model works.

In multiple markets on it’s, uh, saving the world, saving food and doing something good is something universal.

Yeah, totally. Just out of, you know, got me thinking there was, was there two years ago when there was this big hype of these hyper fast, uh, grocery. Startups that came up the biggest one, I think in Europe was in Germany, gorillas.

They raised like [00:34:00] over a billion euros in a year or something like that. Insane. Um, that model has not, as far as I can tell, worked out that well. I think a lot of these companies had to shut down. Um, do you think that obviously their play was pure convenience and quick, quick, quick. Um, do you think that that is the direction in which the kind of the food, the food shopping is going to go, or is it going to be more on value?

Or is there going to be room on this huge market for, for kind of both opportunities? Because obviously you guys are focused more on the value piece. You know, in addition to the impact piece of it, or are you also then looking to add kind of convenience and speed to the equation? It’s kind of a broad question, but where do you think the whole food, um, grocery market is gonna, is gonna evolve?

Yeah, you know what, this is really hard, right, to know. I don’t think that there is a simple answer [00:35:00] to that question, but, but, but what, what really What’s astonishing to, to witness was the herd behavior during the pandemic because all of a sudden everything changed. On the quick commerce was the new thing, the new orange or whatever you say.

Uh, on the, um, uh, all of a sudden everyone needed to have milk, you know, by their door within 10 minutes. That was all of a sudden, you know, that everyone believed in. And they all, everyone also thought that this. would not go away. So I, that combination of course made them a triple unicorn overnight. So that was of course really exciting to see.

Um, but now, I mean, we are in a new situation again where. Where maybe you and I, we’re not looking for that kind of service anymore, or not at least in that extent. It could be nice, right? I’m doing pancakes here and I’m out of [00:36:00] milk. I mean, please help me out. And there, there’s a gorilla, right? So that’s amazing.

But I think, I think I, I read somewhere that the long live the niche, right? So I think the niche is, uh, that, uh, will, will, will be the winners. I think it would be very hard for finding the, this bri broad concept that kind of takes over the world. Everyone wants one type of service. Um, and, and I think, you know, the freedom of choice that is so strong, right?

We have internet, we can choose whatever we like, we could have you, you can have one white sneaker and one white and that’s a perfect match for you, and yeah, so I, I, I think no one really have cracked the food question as a whole, uh, and, uh, You know, to do everyday grocery shopping is, you know, not everyone [00:37:00] can plan it or are made that way that they like to plan their grocery shopping like, I don’t know, I shop a lot with my emotions.

Today I feel like having, I don’t know, chicken spaghetti or something. And then that inspiration comes to me going into the store maybe. And that is really hard to create something like that online. Um, but on the other hand, you could, of course, you know that in the future you will do, make, do I don’t know spaghetti dinners for a long time ahead, right?

So you could bunker up on that. So maybe there are, you know, these niches that could work, but I now understand that this was a terrible way of responding to your smart and bright question. No, not at all. Not at all. I’m trying to find my way through this because it’s, it’s really tricky, right? It’s not one simple answer to it.

No. And I

mean, the thing is [00:38:00] the grocery. Global grocery market is so humongous that even if you’re able to any niche inside that market is going to be very, very, very attractive to kind of as a growth opportunity. Um, you mentioned also, I mean, you expand, you set your sights on Germany. That’s been really successful.

You also went to the UK and I think it was last year you decided to pull back because the changing market conditions meant that it’s not, it’s not really going to be possible to finance this longterm bet. Um, even if you have conviction in the market and in your product, but just knowing that this is going to take too long, we won’t be able to make it work.

So I think it’s safe to say you guys kind of made a pretty hard left term to focus on profitability. Can you talk about what that meant for the company? Um, were you previously in this kind of like growth, growth, growth, um, stage and everyone from the, you know, the. Every team member was kind of focused on just the growth KPIs.

And then you had to make this [00:39:00] hard, hard, uh, hard kind of pivot or what did that transition look like? Was it, was it as dramatic as that? Yeah.

I mean. We, we needed to step out of the market and that affected a lot of people, so that was of course dramatic and I’m really, you know, sad that we need to, needed to do that.

But I’m also very happy that we, you know, now have a sane way forward where we are building a profitable model. Um, and we have really, as you said, I mean, yeah, pivoted a bit, right? We are now only zooming in to, to, uh, to turn profitable and that’s, that’s the main objective now. Um, the, um, uh, it, it did change the way we internally look at our, our journey ahead.

But again, we have also, we have really ambitious goals, so it. didn’t take away that we are, we are still a very [00:40:00] much of a growth company. So, you know, all of that kind of culture stayed within the walls. Um, but maybe we adjusted a bit to the environment around us because what is cool about our company? I mean, regardless, For what weather it’s outside and what climate, financial climate or, uh, normal weather, I guess.

Uh, we have continuously grown and we have been growing in the same kind of rapid pace. So that is, that is something that is very important to say and we have been simultaneously Uh, as we’ve been growing, also been focusing on, on, on profitability. So, I mean, we already last year turned profitable for the Swedish market.

And we will already this year be profitable for the full of the Nordics and next year for, for Germany and more or less as a whole group. So it’s a, it’s amazing actually to, [00:41:00] to see this happening in front of our eyes. Um, and, um, we have now, uh, found a way of, of really Um, you know, dealing with the cost for, or cost some way of, you know, dealing with these, um, uh, low margin goods, uh, in automating or warehouse.

So we’re really, really, really happy about finding that cool way, and we now have, uh, a lot of support from robots. Picking and packing our boxes on that, something that is really cool and a big investment, but I would say it was very tough for us to both kind of doing that and also asking for money for even more growth.

So we focus on the market that we’re on and zoomed in on

that. That makes a lot of sense and, um, go turning profitable, turning profitable as I believe I read that kind of the first European grocery, online grocery e commerce [00:42:00] business that, that it will be able to do that. So that’s pretty incredible. It really shows that the model is working.

Um, also it will. If not eliminate, at least reduce your dependence on going to investors for more capital. So I’d love to talk a little bit about fundraising. Cause you’ve done, like I said, a lot of it, something like 200 million euros in total about there. Um, I think you said. Uh, there was an article in an interview with you where you talked about some of the pressure, the stress that, that adds kind of like all having to chase, having to chase, um, investor money, keeping the valuations going up, which of course brings along with it added expectations of future growth.

Uh, would you, would you, would you, how do you think about that whole piece? Cause obviously it comes at a cost, right? At the same time to build this business, you needed to get to certain scale, which requires capital. So, so is there anything you’d change about how you’ve gone about it if you were to do it [00:43:00] over or, or kind of, was it.

Was this the right way to go, all things considered?

Yeah, I mean, first of all, I mean, looking for capital, meeting really intelligent and smart people and telling them about your company and getting them excited about your company, the vision you’re building. The, um, yeah, the ideas you have to, to create this amazing company and so on and getting their acceptance is probably the wrong word, but more, you know, they, that they, they agreed that, yeah, this sounds reasonable, right.

And, and, and, and from that point and getting them in the boat, um, um, you know, following your journey, I had, that is a really, really interesting and, uh, valuable, oh, it’s a. It’s a great journey anyway. I mean, we have learned so much. Uh, I, I don’t know how many rounds, capital [00:44:00] rounds, raised we have done. I would count it as maybe six or seven or something like that.

And every time you come back after one of those kind of ventures, you, uh, you need to change as a company. So I put a lot of pressure on you, right, to, you know, now we’re We not only promised a lot of things to happen, but we also learned a lot of things and said that, you know, these are good ideas. Let’s try to implement them as soon as possible.

And also, I mean, the capital that is getting deployed here. Needs to, you know, find, uh, you know, do something positive with the valuation of the company, right? In a very, very short time, period of time. So you need to make all of these changes to happen very, very fast. So, but all of that is super, super, super exciting.

Um, the, the, the downside of, of all of this is, of course, Takes a lot of [00:45:00] time. It takes a lot of time from you away from, you know, building the company. So that is one thing. And it takes a lot of time also, you know, thinking about this. I mean, yeah. Will we get funded this time? You know, will I be able to?

pay salaries next month. I mean, you’re, you, you know, at some point you’re down to that, you know, how many months do we have left on our bank account? Um, um, the, you know, waking up every morning and looking at the bank accounts. So did we get this right? I mean, Oh yeah. Okay. Now we know roughly around how long we should live.

I mean, all of that puts a lot of pressure to, to on you and so on and on the team. Um, then you, um,

yeah, you need to stay resilient to all of those feelings and, and you need to, uh, mentally be very, very strong to, you know, and, and [00:46:00] guide your team that say, you know, we will make this happen. Uh, so of course there’s a lot of pressure, right? And, uh, you as an entrepreneur, um. If you fail this, uh, or at least that what, how I thought about it is like, shit, I can’t fail this because if I fail this, everything I build up will go down the drain.

And uh, and also, you know, the things I promise people around me and so on will also be lost. Yeah. So I guess those are the emotional things that you, you were kind of asking about here.

Um, yeah. Yeah, I think. It sounds like it’s really important to know yourself, like either you’re a person who can deal with those expectations and that pressure and that responsibility, or you’re someone, um, who would prefer maybe to take it a little bit slower, think a little bit smaller, but, um, be able to do it at a different pace and maybe perhaps on your own terms, as [00:47:00] opposed to this, You know, because investors, they want to see growth quarter of a quarter, whatever the period is like, they don’t really care about if there was something going on, they want to see, they want to see the numbers go up.

So. I guess it’s about knowing yourself and what’s, what’s right for you and your business.

I don’t know. I think endurance is the right word. I mean, you really need to hang in there and not give up. And, and, you know, for us to this point has been 10 years of that. I think that, uh, this last round took us to full profitability and fully funded.

So we’re super happy about that, that we don’t need. More capital just to get, you know, keep on running. Uh, if we ever take on more capital, it would probably be to, you know, expand somewhere else or do something other exciting things, but we should now be a self funded company from, from now on onwards.

And then that’s a, it’s a great feeling. Yeah. After 10

years, six, [00:48:00] seven rounds to be able to get to that point. I think that must feel really incredible. Um, So kind of the strategy going forward is focusing on these markets that you’re in right now getting to profitability, and then, you know, maybe looking at what’s out there in terms of new markets, or maybe other other kinds of opportunities.

Is that kind of how you think about it?

I mean, we’re still very much still on that growth journey, as I mentioned, and we’re very much keen to show that this is still a very much of a global opportunity. So I would say that we haven’t even started yet. I think that is a sentence I would like to, you know, that is, that is the sentence that I keep in my head, at least.

It’s really good. Um, you stepped away from the role of CEO, I believe was last year. So now you’re involved, but not in a operational [00:49:00] kind of day to day capacity. So, just on a personal level, what are you currently, is ModSmart still the sole focus of what you’re doing, or are you also exploring? Other, other ventures or other, other ways to, uh, other types of, uh, types of work.

Yeah, exactly. I stepped down as CEO, uh, after 10 years and it was such a, it was a really weird feeling. I’ll tell you. I mean, the first couple of weeks was really, really weird. You know, uh, I think that a job as a startup CEO is like you work 24 seven. And doing that for 10 years it does things to you, right?

And and All of a sudden that it that goes away a bit and uh, yeah, that was weird But now i very much enjoy it. I uh, i’m still in the company. I I do a lot of the um I’ve been trying out new things. I mean, along the way has been a lot [00:50:00] of these tingling, tangling, exciting things around the company that we haven’t been able to kind of look into or zoom into and, and try out.

So those are, uh, business developing. Things I’m, I’m, I’m, I’m doing right now. So I, I find that really, really, yeah, fun to do. So that is what I’m doing. I’m also supporting a few companies, um, right now. Uh, and I hope to do even more of that, uh, in the future. Uh, I’m, I’m still being able to continue supporting, uh, Motato smart, smart, um, as we, you know, move forward and grow.

So I’m on the board, uh, of Smart Motato and a few other smaller

companies. It must be really rewarding to be able to step away from kind of like the day to day of a company that you for 10 years kind of led to this critical point in the company’s trajectory. And then kind of watch now from the side, I mean, still working.[00:51:00]

But, but kind of more, more from the sidelines watching it. I mean, the, you know, the next 10 years could see it go from, you know, a hundred million to, I don’t know, a huge, huge, huge, huge, still, I mean, it’s a huge now, but, uh, even, even much more so.

Oh, I’m excited to, to see how big we now can grow this. I think there is so much more potential yet to, um, yeah, for us to, to grab.

But absolutely.

It’s going to be really exciting to see, see what you guys get up to. Kala, thank you so much for, for coming on and sharing about the, the journey and, uh, for people who wanna follow you. Are you on LinkedIn? Anywhere else that

you’re active? Yeah, no, LinkedIn is probably a good way to, to look into that.

That’s where, yeah, so absolutely hook, hook me up, reach out, uh, say hi. If you have any cool ideas, I mean, let me know.

Perfect. I’ll put the, the link in the show notes and, uh, thank you so much. Good luck. Thank you with everything you got planned for 2024 [00:52:00] and I, uh, hope it’s, uh, wish you all the best. Thank

you.

Thank you so much for having me on. It’s been really interesting and I enjoyed it very much. Thanks. Thank you for listening. You can find all episodes of The Growth Pod on Spotify, YouTube, and Apple Podcasts.

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