Austrian food waste startup Afreshed has taken over its German competitor Etepetete.

      German consumers discard 4.4 million tonnes of food annually, amounting to approximately €6 billion. Austrian startup Afreshed believes that the answer lies in consolidation rather than competition, having acquired Munich-based rival Etepetete and secured a mid-seven-figure amount to extend its organic rescue-box initiative across the border.

      The announcement made on Monday merges the two leading “ugly produce” subscription services in the German-speaking market. 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 conventional retail's aesthetic standards, such as crooked carrots or undersized apples. The model proved successful quicker than many direct-to-consumer food ventures: by 2023, the company achieved €4.7 million in revenue, aimed for eight figures in 2024, and reports having reached break-even in Austria.

      Etepetete, which has been operating similarly since 2015 from the Munich Wholesale Market, brought its own accomplishments to the table. Established by Georg Lindermair, Carsten Wille, and Christopher Hallhuber, it 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 campaign on Econeers, supported by 812 private investors.

      The rationale behind the acquisition is clear: Afreshed, with its tech-driven operational model, dominates Austria with a national delivery framework, a fleet of around 20 vehicles, and proprietary software that optimizes delivery routes to minimize emissions. What it needed was a presence in Germany, a market roughly ten times larger. Etepetete had customers across all 16 German states, particularly in Baden-Württemberg, Bavaria, and Berlin, but seemed to stall post its crowdfunding round with no new institutional funding noted.

      “The foundational philosophy of both companies is fundamentally similar,” Forsthuber remarked in a statement. Instead of spending years building a German customer base from the ground up, Afreshed opted to purchase one. Co-founder Bocksrucker noted that Etepetete will function as a distinct brand, referring to this acquisition as “the first of more such initiatives” and expressing the aim to become “the leading provider of rescued food in German-speaking regions.” The acquisition cost was not made public.

      In a related development, Raiffeisen-Holding Niederösterreich-Wien, one of Austria's major diversified holding companies, is acquiring a 25.1 percent stake in Afreshed. This mid-seven-figure investment will support expansion into Germany and further technological advancements.

      This stake aligns Afreshed alongside significant portfolio companions. Raiffeisen-Holding’s “Food & Beverages” division already contains Agrana, a publicly-listed sugar, starch, and fruit-processing entity, and Neoh, a sugar-free confectionery startup that also received a mid-seven-figure investment from the holding company. Raiffeisen and Agrana together committed €5 million to FoodLabs, a Berlin-based venture firm with over 60 food-technology companies in its portfolio.

      For Afreshed, the value of this investment lies as much in the strategic partnership as it does in the financial backing. A strategic investor with strong connections to Austria’s agricultural supply chain adds credibility that a purely financial venture capitalist could not offer. It also indicates that Raiffeisen views the rescue-box model not just as a niche sustainability effort but as a viable distribution method within the larger food ecosystem.

      The underlying issue that these companies address is significant. Fresh produce constitutes a disproportionate portion of avoidable food waste in Europe, estimated at around 35 percent, with EU research indicating that fruits and vegetables make up nearly half of all food waste by weight from households. Waste occurs at both the retail and consumer levels, as retailers reject produce that does not meet aesthetic standards and consumers tend to buy more perishables than they consume.

      Rescue-box companies target the supply side, purchasing produce that farmers would otherwise discard or send to biogas facilities. The economics can be favorable since the cost of raw materials is considerably lower than traditional wholesale, while the subscription model provides consistent demand that simplifies logistics.

      However, there are limitations to this model. Imperfect Foods, a prominent US competitor, was acquired by Instacart in 2022 after facing challenges with unit economics at scale. Oddbox, a competitor based in London, has raised £16 million but remains limited to the UK. The trend in the sector has been similar: strong initial growth driven by sustainability-minded consumers followed by the challenging task of achieving profitability in last-mile delivery.

      Looking ahead, Afreshed’s declared goal is to dominate the pan-DACH market, encompassing Germany, Austria, and Switzerland. The Etepetete acquisition provides an immediate foothold in Germany, but transforming an acquired customer base into a