Nilus

Nilus is a social enterprise that is virtualizing and uberizing food rescue with the goal of creating affordable and healthy food markets for low income people. Our vision is to become the driving force behind the digital transformation of the food rescue industry. We developed a digital platform that connects (through a marketplace) food producers/retailers with soup kitchens and other institutions that provide food services to low income people. Every time we facilitate the matching between food donors and beneficiaries, we crowdsource the logistics through a network of licensed drivers. We are a financially sustainable enterprise. We charge for transportation services and pay our fleet of professional drivers market rates. We have successfully implemented the solution in two Argentine cities, where we have been able to rescue more than 300 tons. We are expanding to two new cities in Argentina, Uruguay and the United States (Puerto Rico)

We’re solving the problem of food waste. The world discards one third of the food it produces while still in edible condition. That is 1.3 billion tons a year, roughly the combined weight of the Empire State Building, the Golden Gate Bridge and the Eiffel Tower. This phenomenon takes place in a world where 820 million people suffer from hunger. Food waste is one of the hidden drivers behind climate change. The carbon footprint of food waste is estimated at 3.3 Gigatons of CO2 equivalent, which makes it the third top emitter in the world after the US and China. The water footprint (that is, consumption of surface and groundwater resources) is estimated at 250 km3, which is equivalent to the annual water discharge of the Volga river. Food production that then goes to waste takes almost 1.4 billion hectares of land (30% of the world’s agricultural land area). And finally, it is estimated that 19% of all pesticides are used in producing food that we waste. Because of the size of this problem, food waste is specifically mentioned in Goal 12.3 of the UN Sustainable Development Goals. We are tackling this food waste scandal.

We are benefiting low income people who face food insecurity, and who regularly attend soup kitchens and other social institutions for food access.

We designed the technology MVP in 2017/2018 in close collaboration with the most prominent incumbent actors in the food waste industry: food banks. We started working with the local food bank from Rosario, a 1.5M people city in Argentina, in August 2017. Then in August 2018 we expanded to a second city in Argentina, Mar del Plata, in association with the local food bank as well. And finally, in January 2019 we signed a collaboration agreement with the Argentine Foodbanking Network, to expand our technology to 5 more cities in the country, all in association with the local food banks.

As of June 15, 2019, we have rescued over 300,000 tons of food - that is, roughly, 950,000 plates. We have completed 584 trips and 1387 deliveries in both cities. We are currently in the process of opening operations in Neuquen and La Plata, Argentina, and thanks to a recent alliance with the Global Foodbanking Network, we are planning to expand internationally to Colombia and Mexico.

We developed a platform that works as a digital marketplace and logistical solution. Through our platform, food donors (producers/retailers) notify the availability of food donations (food with no or very low commercial value but still edible) using a mobile or desktop app. That information is consolidated in our database (stock management) and offered to soup kitchens and low-income families. We also developed a mobile app through which soup kitchens and low income families make online orders and electronic payments. Once the payments are in, we use our dashboard to create and  broadcast trips to our network of licensed drivers. Through a mobile app, drivers get notifications, accept/reject trips and receive instructions to make the deliveries.

The lack of commercial value is based on three factors: (i) aesthetic standards; (ii) packaging defects; and (iii) proximity to expiration date. It costs a lot of money to producers and retailers to dispose of this food. In Massachusetts, the cost of disposing a ton of food is estimated at $75 per ton. In Buenos Aires, the cost is around $30. Food donors have the incentive to donate these products for free to anyone who is willing to guarantee logistic standards and assume liability risks. 

Commercial food transportation in cities is a very entrepreneurial business. Hundreds of drivers moving stuff around every day. Food transportation is very time specific. It takes place mostly from 4 to 9 am. There is excess capacity in food transportation companies and entrepreneurs during afternoon times. Nilus is tapping into that capacity to make the deliveries. There is a big opportunity to virtualize and uberize the whole food rescue system, which is mostly analog and based on each institution having its own vehicles. 

We are empowering food donors by digitizing their food donations and lowering the cost of food-rescue logistics by crowdsourcing the pick-ups and deliveries using the excess capacity of commercial food transportation. We are also lowering for soup kitchens and low income families the cost of accessing food by digitizing their order experience and facilitating cost-sharing practices by combining deliveries in one single trip.

In summary, we are creating value for different actors. Supermarkets and producers reduce final disposal costs and get tax deductions. Soup kitchens increase their logistical capacity and get food at discounted prices. Food Banks also increase their logistical capacity. And drivers receive an extra income (we are increasing their salaries by 20%)

We are not the only food waste startup in the market, but we do have some differences. First, most food waste startups are just a marketplace that connects supply and demand. We do that, but we also provide a logistical solution. Those startups who do provide some kind of logistics, it is typically based on a network of volunteers. From our perspective, that model is not predictable and, definitely, not scalable. We also have the higher traceability in the market. Our technology allows to track and geolocate drivers in real time. In summary, we are innovative because we are the first startup seeking to resolve food waste using a (paid) crowdsourced model. The technology for collaborative transportation clearly exists - Uber, Lyft, Cabify - they’ve all resolved it. What’s innovative in what we’re doing is that we’re applying this technology beyond passenger transportation, We are applying that technology to a social venture that aims to fix the food waste problem. 

We have developed three mobile applications and a dashboard that integrates the three apps: 

1. Donors App: this is a simplified interface to notify the availability of food donations and upload stock available for donation. We are testing the interface with Walmart in Argentina and prepare to work with Supermercado Exito in Colombia. 

2. Drivers App: this is a mobile application where our registered drivers can: receive trip requests, accept them or deny them; visualize the rate we offer for each trip; access the pick-up and delivery information (time, address and person who receives it); activate the route in Google Maps; take pictures of the food received and delivered; report when a trip is completed; and request help from our dispatching team. 

3. Beneficiaries App: this is the mobile app that soup kitchens use to visualize the food inventory available for donation, and make the orders online. Beneficiaries can select whether they want a Nilus driver to take care of the delivery, a time slot to receive it, and the information of the driver who will do it.

4. Dashboard: this is a desktop application to manage stock, create trips and deliveries, visualize the fleet of registered drivers and beneficiaries, and access all the metrics associated with every donation: type of food; weight; nutritional value; date delivered, etc

Our solution is impacting lives in three concrete and specific ways: 

1. We are making it possible for low income people who regularly attend soup kitchens to consume healthy and nutritious that otherwise they wouldn't have access to, by lowering the logistics cost associated with procuring food donations. By rescuing and distributing perfectly edible food that was about to be discarded, and charging a minimal logistic fee to soup kitchens - akin to 10% of the food's market price - soup kitchens now order online and receive fruits, vegetables and dairy products that they didn't use to consume in the past because they couldn't afford to buy it in regular supermarkets.  

2. In addition, for those soup kitchens that did receive donated food in the past from Food Banks, we're also lowering the costs of procuring the donated food by 30% or more, by using crowdsourced logistics and route optimization technology to procure the food. In this sense, we're increasing access to healthy food for the soup kitchens we work with by 30%. 

3. We are also reducing carbon emissions to the environment. By reducing the levels of food waste in a city and facilitating the consumption of the food, we are lowering the carbon footprint of food waste by a ratio of 1.45 (see United Nations Food and Agriculture Program: http://www.fao.org/3/i3347e/i3347e.pdf)

As of June 15, 2019, we have rescued over 300,000 tons of food - that is, roughly, 950,000 meals, in the two Argentine cities in which we are operating (Rosario and Mar del Plata, both over 1 million people). We have completed 584 trips and 1387 deliveries in both cities. We are currently opening operations in Neuquen and La Plata, Argentina, with the local food banks. As part of a recent alliance with the Global Foodbanking Network, we are expanding internationally to Colombia and Mexico.

In the two cities we're operating - Rosario and Mar del Plata - we're serving 80 soup kitchens, which feed 30 people on average per meal, and serve 1.5 meals a day on average. Assuming - conservatively - that the people who attend these soup kitchens remain constant, we estimate that we feed 2,500 people on a regular basis. 

In a year, and assuming we obtain the funding we need to scale, we expect to be operating in 5 cities in Argentina, 3 cities in Colombia and 1 city in the United States (San Juan, Puerto Rico). By then, we expect to be serving 650 soup kitchens, and - again, assuming people who attend those soup kitchens remain constant - almost 20,000 people. 

In 5 years, we expect to be operating in 8 cities in Argentina, 5 cities in Colombia, 5 cities in Mexico, 3 cities in Peru and 5 cities in the United States, serving 2000 soup kitchens and almost 65,000 people .   

 

Our goals for next year are: 

• To finish developing our machine learning tool to optimize routes and cluster beneficiaries, for faster and more efficient delivery. 

• To consolidate our operation in 5 cities in Argentina, in association with the Argentine Foodbanking Network and Walmart. 

• To start the operation in Puerto Rico, in association with the Clinton Foundation and Marriott. 

• To start the operation in Punta Cana, in association with Club Med.

• To start the operation Colombia, in association with the Colombian Foodbanking Network and Exito Supermarket

Our goals for the next five years are: 

• To develop an IoT solution to improve the traceability of our operation

• To develop an AI-based nutritional tool, to maximize the nutritional value of the food we distribute

• To expand to 15 countries, and 60 cities across the world

Some potential market and regulatory barriers that could affect our growth rate next year and the next five years are:

• Regulation: food waste and food transportation regulations are both national and municipal. This means there are many layers of regulatory burdens we have to comply with. In some cases, this is costly. Some countries, for example, are more friendly than others in terms of tax breaks, liability laws (good Samaritan laws) and licensing requirements. 

• Technology adoption: our strategy is mostly focused on food banks across Latin America, where sometimes they show low levels of familiarity and understanding of how technology works. Sometimes they are impatient with bug fixing and deployment, and for digital solutions like ours, it costs significant resources. 

• Financing: Nilus has a lot more demand from cities, countries and clients than it can finance with its existing funding and revenue. We find ourselves saying no to many opportunities, simply because we cannot bankroll it with our revenue. Food rescue (and crowdsourced logistics) is scale business with low-margin rates per trip. Therefore we need capital to scale and finance some upfront costs.

1. We're tackling the regulatory barrier through strong alliances with prestigious incumbents, most notably the foodbanking networks of the countries we're trying to expand to. In addition, we have an alliance with the Global Foodbanking Network, and their blessing in terms of technology and safety standards. We've also built an alliance with the Harvard Food Law and Policy Clinic (https://hls.harvard.edu/dept/clinical/clinics/food-law-and-policy-clinic-of-the-center-for-health-law-and-policy-innovation/) to promote best practices that support our work in the countries we're trying to operate. 

2. For technology adoption, our best strategy so far has been to be present as much as we can, and earn our partners' trust with time and perseverance. We haven't found too many shortcuts yet, and we consider it essential to establish ourselves as a credible startup walking on the shoulders of the food banks. So we are traveling a lot, spending a lot of time on the phone, and being as human as we can before automating our troubleshooting and support operations.

3. While we see our mission as a social one, we also see sustainability as a bedrock principle. That is why on top of the Argentine NGO that we started with, we've created a corporate vehicle in the United States - that we're in the process of certifying it as a B Corporation - and we've gone through a seed round of USD 1.2M, that we're en route to closing successfully.  

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We have 8 full time staff, including:

• Ady Beitler, co-founder and co-CEO
• Germán Sturzenegger, co-founder and co-CEO
• Ezequiel Lamónica, CTO
• Karina Campos, Operations Manager
• Vanina Fajgelbaum, Product Designer
• Tomas Fernandez, Back-End Developer
• Jose Quiroga, Front-End Developer
• Agustin Grassi, Operations Analyst

We have 5 part-time staff, including: 

• Mariana Valls, Legal Counsel
• Tomas Zanetti, Operations Analyst
• Alejandro Bautista, Business Development Associate
• Catalina Grillo, Business Development Associate
• Josefina Peña, Community Manager

We have been able to ensemble a technology and operational team that provides the basis for Nilus future expansion. German and Ady, co-founders and co-CEOs, met at Harvard 10 years ago. Ady specializes on how to use technology to lift people out of poverty. German specializes on food waste and solid waste management, and also brings his finance expertise.  Ezequiel, CTO, is a software engineer and MBA with vast experience in developing software for food companies. Tomas is our senior back end engineer, also with vast experience in the intersection between software and logistics. Jose, our front end engineer. Vanina, a graphic designer, who is our product lead and UX specialist. Karina, an environmental engineer who worked for the World Bank, runs and supervises operations on a daily basis. Agustin and Tomás are industrial engineers who run operations at the city level (Rosario and Mar del Plata). Mariana, in charge of all legal and liability analysis, is probably one of the best known environmental and food lawyers in Latin America. 

We have partnered (and expect to partner) with several strategic stakeholders:

• In 2017, we won the Google Impact Challenge Argentina that provided us seed funding to develop and test the technology and business model. 

• In 2018, we signed a collaboration agreement with Argentina’s FoodBanking Network to expand Nilus’s model throughout the country in association with local food banks.

• In 2018, we signed a collaboration agreement with PriceWaterHouse to develop our business plan. 

• In 2018, Nilus was selected as one of the first 12 startups of Harvard’s Innovation Labs Accelerator Program (LLX), where we participated in the acceleration program for a 9-month period.  

• In 2019, Nilus was selected by FastCompany as one of the World Changing Ideas 2019. 

• Marriott International: we are in the process of signing an agreement with Marriott International to support food rescue in Puerto Rico

• Walmart Argentina: we are in the process of signing an agreement with Walmart Argentina to rescue food from its hypermarkets. 

Nilus creates value for different actors. Supermarkets and producers reduce final disposal costs and get tax deductions. Soup kitchens increase their logistical capacity and get food at discounted prices. Food Banks also increase their logistical capacity. And drivers receive an extra income (we are increasing their salaries by 20%). 

We have 2 sources of revenue. One is transportation. We make a profit out of every trip by charging drivers a 10% fee. The other source of revenue is food transactions. Soup kitchens pay for the service we provide by delivering the food to them, a logistics fee equivalent to 10% of the food's market price (10% of the retail price, that is, what they would pay in a supermarket). Food rescue is a scale business. We make little money out of every transaction (food delivery). Expansion is the critical variable behind revenue at scale.

We are in the process of raising investment capital from institutional investors (seed round). We raised USD 150,000. We raised this money through Standard Agreements for Future Equity (SAFE). We are in the process of negotiating a SAFE with our lead investor, who is expected to invest between USD 550,000 and 600,000. These investments will finance expansion until each city (market) breaks even and sets its path for financial sustainability. According to the financial plan we developed with PricewaterHouseCoopers, Nilus would break even (positive net operating income) in month 23, assuming an expansion plan that would take the company to 17 cities in 5 counties in the next 24 months. After initial startup costs in each city, Nilus is expected to be profitable and based its financial sustainability on an earned revenue model.  

We are looking to build the best network in the world to help us develop our AI-based solution of logistics optimization, as well as to improve the nutritional value of our deliveries. The MIT is the number 1 engineering school in the world, and we are looking to tap into its deep network of professionals and alliances to take our technology to the next level and become a truly global player in the food waste space. We will also need significant capital to invest in world-class engineering. We're also hoping to capitalize on the MIT's prestige and network to this end.

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We would like to partner with the national food banks of Colombia and Mexico; Walmart; and the Harvard Food Law and Policy Clinic. 

With the Mexican and Colombian Food Banks, we would like to establish alliances to implement our technology across their 59 local food banks (19 in Colombia and 50 in Mexico). We are already in conversations with them and about to get started with pilot projects in Bogota (Colombia) and Quintana Roo (Mexico). However, with MIT Solve's support, we believe we would be able to design better scaling strategies, based on more robust technology development forecasts and prioritization.

With Walmart, we would like to test the last-mile logistic model that we're piloting in Argentina with Walmart in La Plata, which will soon expand across the country. In this model, we organize daily rescues of fruits, vegetables and dairy products and distribute them across soup kitchens in their vicinity.   Finally, with the Harvard Food Law and Policy Clinic, we would like to work in the legal aspects of our operation, including analysis of the different regulations applicable to us in the cities where we are about to open up operations. We started the dialogue with the Director of the Clinic, Emily Broad-Leib. MIT Solve's involvement can be valuable to help us prioritize our expansion strategy and incorporate technology considerations in the legal analysis.

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We will use the funding to apply machine learning and deep learning to develop a form of predictive logistics that can lower the costs of rescuing food from farms, and at the same time maximize the nutritional value of every order delivered by Food Banks to their beneficiaries. Using images from farmers when they begin their harvest, combined with historical data on average waste volumes for that particular product, we believe we can anticipate the volume of waste they will have at the end of the harvest. If we combine them with images from empty spaces in food transportation vehicles (trucks and utility vehicles) and powerful geolocation technology, we believe we can develop a system where we utilize the empty space in the vehicles and, based on their planned route and/or proximity to beneficiaries, assign to them trips to pick up and deliver the food automatically. In addition, if we request from soup kitchens to share pictures of their last three supermarket purchases in a given period, we can cross the data with the rest of the soup kitchens in the vicinity and create nutrition profiles of each soup kitchen (i.e. the combination of vitamins, carbs and protein that they normally consume). And based on these profiles, we should be able to assign to them food donations that contain the nutrients that they need most based on their consumption patterns, as opposed to those that have maximum nutritional value on an absolute scale. 

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