Austrian food waste startup Afreshed has acquired its German competitor Etepetete.

      German consumers dispose of 4.4 million tonnes of food annually, translating to around €6 billion in waste. The Austrian startup Afreshed believes that the answer lies in consolidation rather than competition, having acquired its Munich-based competitor Etepetete and secured a mid-seven-figure investment to expand its organic rescue-box concept into Germany.

      The acquisition, announced on Monday, merges the two largest subscription services for "ugly produce" in the German-speaking region. Founded in 2021 in Linz by Lukas Forsthuber, Bernhard Bocksrucker, and Maximilian Welzenbach, Afreshed offers boxes of organic fruits and vegetables that do not meet the aesthetic standards of regular retail—these include misshapen carrots, small apples, and oversized zucchini. The company's model has shown rapid success compared to most direct-to-consumer food initiatives: by 2023, it achieved €4.7 million in revenue, aimed for eight figures in 2024, and reports reaching break-even in Austria.

      Etepetete, which has been operating a similar business from the Munich Wholesale Market since 2015, brought its own accomplishments to the table. Founded by Georg Lindermair, Carsten Wille, and Christopher Hallhuber, the company had delivered over 250,000 boxes and rescued more than 1.5 million kilograms of produce prior to the acquisition. In 2023, Etepetete raised €1.79 million through a crowdfunding round on Econeers, backed by 812 individual investors.

      The rationale behind the acquisition strategy is clear. Afreshed, with its technology-centric operational model, dominates the Austrian market through a nationwide delivery network and its own fleet of about 20 vehicles, aided by proprietary route-planning software aimed at reducing last-mile emissions. However, it lacked a presence in Germany, a market approximately ten times larger. Etepetete, on the other hand, had a customer base across all 16 German states, particularly concentrated in Baden-Württemberg, Bavaria, and Berlin, but seemed to have stagnated following its crowdfunding campaign, without any announced follow-up institutional investment.

      "The foundational philosophy of both companies is essentially aligned," Forsthuber stated. Rather than investing years and resources into establishing a customer base in Germany, Afreshed opted to acquire one. Co-founder Bocksrucker affirmed that Etepetete will function as an independent brand moving forward, describing the acquisition as “the first of more to come” and emphasizing the aim of becoming “the leading provider of rescued food in regions where German is spoken.” The acquisition price has not been disclosed.

      Additionally, a significant corporate maneuver accompanied the deal. Raiffeisen-Holding Niederösterreich-Wien, one of Austria’s largest diversified holding companies, has acquired a 25.1 percent share in Afreshed. This mid-seven-figure investment will support the expansion into Germany and further technological development.

      With this investment, Afreshed aligns itself with notable portfolio companies. Raiffeisen-Holding’s “Food & Beverages” division already includes Agrana, a publicly listed firm in sugar, starch, and fruit processing, along with Neoh, a startup in sugar-free confections that also received a mid-seven-figure investment from Raiffeisen. Moreover, Raiffeisen and Agrana jointly pledged €5 million to FoodLabs, a Berlin-based venture fund featuring over 60 food-technology companies in its portfolio.

      For Afreshed, the significance of this investment is as important as the financial backing. Having a strategic investor with strong connections to Austria’s agricultural supply chain adds credibility that a purely financial venture capital firm might lack. It also indicates that Raiffeisen views the rescue-box model not merely as a niche sustainability initiative but as a viable distribution channel within the wider food industry.

      The issue these companies are tackling is significant. Fresh fruits and vegetables constitute a disproportionate amount of avoidable household food waste in Europe, accounting for approximately 35 percent, as suggested by figures stated by Afreshed, with EU research indicating that fruits and vegetables make up nearly half of all household food waste by weight. This waste happens at both ends of the supply chain: retailers often reject products that do not meet cosmetic criteria, while consumers tend to buy more perishables than they can consume.

      Rescue-box companies target the supply chain by purchasing produce that farmers would normally discard or send to biogas facilities. This model can be economically viable because the cost of raw materials is significantly lower than conventional wholesale, and the subscription approach ensures consistent demand, facilitating logistics.

      However, the model has limitations. Imperfect Foods, the most recognized equivalent in the US, was acquired by Instacart in 2022 after it faced challenges with scalability. Oddbox, a competitor based in London, has successfully raised £16 million but remains confined to the UK. The trend throughout the industry has been similar: strong initial growth driven by sustainability-focused consumers, followed by the