It’s estimated that about a third of all food produced worldwide every year, which is approximately 1.3 billion tons, is estimated to be wasted. Aravita, a Brazilian artificial intelligence startup, thinks that supermarkets are the best place to start fixing this problem.
Marco Perlman, co-founder and CEO, started the company with Aline Azevedo and Bruno Schrappe in 2022 to tackle waste in the fourth-largest food producing country in the world where 33 million Brazilians have some type of food insecurity.
Aravita is developing an AI-powered solution for supermarkets that looks at variables, including climate, seasonality, consumer behavior and economic scenario, to manage the purchasing of fresh food — mainly fruits and vegetables — to reduce the instances of surplus items and lost sales due to waste. At the same time, the software increases the availability of items in demand.
“Supermarkets are our target audience because they are a great place to drive the first wedge of data availability,” Perlman told TechCrunch. “They have point-of-sale consumer data, and this is the data that we need to start making the predictions for low-demand forecasting. Unlike other parts of the supply chain, where the data is much harder to get a hold of, eventually we think that this will be digitized.”
Aravita is still in the very early stages: It has a conceptual prototype and started a pilot with a mid-sized supermarket chain near São Paulo and has the first set of algorithms developed. It is also in the process of integrating the first database of historical data into that model.
However, that first pilot didn’t come easy. Perlman recalls that potential customers were initially worried that startups were “having difficulty raising money, hiring and surviving,” and were uncomfortable giving store data to a company without financial resources that could stick around.
Aravita co-founders, Marco Perlman, Aline Azevedo and Bruno Schrappe. Image Credits: Aravita
So the trio started reaching out to investors and was able to secure a $2.5 million investment earlier this year, co-led by Qualcomm Ventures and 17Sigma.
“Fresh food management is highly fragmented and complex,” said Michel Glezer, director of Qualcomm Wireless GmbH and director at Qualcomm Ventures, in a written statement. “Aravita’s solution enables retailers to optimize inventory management, helping increase efficiencies and reduce waste.”
Joining those two firms were Bridge, DGF Investimentos, Alexia Ventures, BigBets, Norte Capital and a group of angel investors, including ClearSale partner and CEO Bernardo Lustosa and Flávio Jansen, former CEO of LocaWeb and Submarino.
Aravita is now in good company among other startups tackling food waste that also recently attracted venture capital, including Divert, which is trying to stop food before it reaches landfills; Diferente, also in Brazil, that is finding places for imperfect produce; and food resale app Recelery. They join other companies like Shelf Engine, Apeel, OLIO, Imperfect Foods, Mori and Phood Solutions.
The next steps are to develop the solution over the next few months and add a second pilot customer, Perlman said. He expects to have product-market fit next year and the ability to “step on the gas to accelerate” Aravita’s business model into other supermarket departments, including baked goods, pastry, cold cuts, fish and meat.
The new capital enables the company to hire additional employees and for future innovation, including inventory management, point-of-sale integration and technology development like AI and computer vision for process automation.