The Australian | December 3, 2024 | Jared Lynch, Technology Editor
A Melbourne start-up has raised $17m as it seeks to eliminate food waste and save wholesalers a fortune by better anticipating their restaurant customers’ needs, thanks to artificial intelligence.
Fresho, which James Andronis and Huw Birrell founded in 2015, is now looking to expand to the US, with the raising – led by Geoff Tarrant, co-founder and former executive chairman of Payapps – valuing the company at $120m.
The pair have developed a platform that aims to make ordering produce more efficient at a wholesale level. Mr Andronis said it has replaced fresh food wholesalers dedicating overnight staff to manually process orders, which typically arrived via email, text, voicemails and even faxes, which often resulted in errors and wastage.
Fresho’s AI-powered system automatically converts incoming orders into structured data, while giving restaurants direct access to live pricing and availability through its app.
“If you’re the fresh food wholesaler or supplier, and you’ve got all the hundreds of orders coming in through the night, in all these different formats, you’ve got to have staff sitting there manually transcribing them, entering them into either your system or handwriting them down – you can imagine the errors that are going with that,” Mr Andronis said.
“And also the time, and this is all through the night. So it’s night shift, which is problematic with staff as well. Our solution solves that and actually takes any order from any type of input, whether it’s phone or text or email, and turns it into a sales order.”
According to OzHarvest about 1.3 billion tonnes of food produced is wasted each year, costing the global economy about $940bn. It’s also bad for the environment, with up to 10 per cent of global greenhouse gas emissions coming from food that is produced but not eaten. “If food waste was a country, it would be the third-biggest emitter of greenhouse gases after the US and China,” OzHarvest says.
Mr Andronis says Fresho – which has processed 30 million orders since its inception and 10 million orders in the past year – says its platform has led to a dramatic reduction in food waste.
“Globally, in the fresh food industry, there is sort of upwards of 30 to 40 per cent wastage, across the board,” he said.
“Most of the wastage comes from two places, either the errors through the ordering and the picking process and the delivery, delivery to the restaurants, or from excess buying.
“So the suppliers are going to the wholesale markets or through their fishermen or farmers and growers, whatever it might be, and they’re over-buying because they don’t have visibility on what their customers are ordering in real time. There is a bit of guesswork involved … and you generally see mistakes with that, whereas Fresho enables them to see any second that they’ve got on order coming up for the next day so they can pre-order at the market to get the right stock on hand.
“So, we’ve had some suppliers say they’ve completely erased wastage right down to very minimal levels, and that’s been really pleasing to hear. So in that case, it would be that 30-40 per cent that we’ve seen in savings, but our goal is to continue to reduce wastage across all the operations, between the suppliers and the venues.”
Fresho used ChatGPT maker OpenAI’s model for its proof of concept phase before switching to Amazon Web Services to build out its solution.
Another Melbourne start-up Restoke. AI is also using artificial intelligence to take the guess work out of food ordering and preparation, saying it’s saving restaurants about $8000 a week on average.
Fresho chief operating officer Huw Birrell said “by investing in AI and emerging technologies, we’re not just enhancing operational efficiency; we’re enabling our customers to stay ahead in a rapidly evolving market”.
“As we expand across our existing markets and enter the US, our focus remains on pioneering solutions that help fresh food wholesalers deliver outstanding service with speed, precision, and insight,” he said.
Investor Geoff Tarrant will join Fresho as a director. Payapps, the global construction software firm he co-founded, was acquired by Autodesk for $600m in 2024.
“As a shareholder for more than five years, I have seen the great business James, Huw and the Fresho team have built over that period. I am excited by the opportunity Fresho has to improve the way the fresh food industry operates. The software platform Fresho has built together with recent AI advancements will provide benefits for all participants in the fresh food market.”
