Think - AT LONDON BUSINESS SCHOOL

Feedr: a recipe for success

Lyz Swanton MBA2016 reflects on the execution of a classic startup strategy

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Summary

  • Meal-delivery service provides office workers with personalised menu options from high-quality local food vendors.
  • Founders capitalised on gap in corporate sector by bringing B2C innovation to B2B.
  • Business proved so successful that founders engineered an advantageous trade sale a few years after launch.
 

My three tips for aspiring entrepreneurs

  1. It’s not just about your vision; it’s about communicating and sharing it with investors, your team and your customers. Communicating not just what you do, but why you are doing it is crucial.
  1. It’s not about getting up and having some grand idea and seeing it come to fruition. Every day think, ‘What can I do a little bit better?’ and just get up and do it again, every day.
  1. Be very wary of who you spend your time on. Time is your most precious commodity. Make sure you’re spending your time in the right place; whether that means employees, potential investors or advisors. They all claim to add value, but many don’t and suck up a lot of your time for no return.

When London Business School graduate Lyz Swanton and Harvard Business School graduate Riya Grover met in 2016, they discovered they shared not just a passion for eating healthily, but the pain of not being able to access good-quality food easily in the workplace. The idea for Feedr was born.

Based in London, Feedr delivers personalised meals to office workers as an alternative to companies setting up their own canteens. Its flagship product, Cloud Canteen, assembles daily rotating menus from high-quality local food vendors – mostly artisan and independent food producers – for delivery to offices across the city. The click-and-collect app in effect digitises the physical office canteen, and companies can use it as a wellbeing and engagement tool for employees. The startup enjoyed such solid growth that the founders were able to sell to UK multinational food-service company Compass Group – the largest contract food-service company in the world – for US$24 million (about £17.5 million) in March 2020.

Room for disruption

In a post-Covid world, where we take food-supply companies for granted, it's easy to imagine that Feedr launched into an ultra-competitive marketplace and succeeded through application rather than inspiration. In fact, its genesis owes much to both, as Swanton remembers. “We saw that there was all this innovation in B2C food delivery, but the corporate sector was late in terms of being disrupted by online purchasing and ordering. I thought, ‘This is an area that has a lot of room for disruption. Can you bring some of that B2C innovation to B2B?’ How you eat in the office hadn’t really changed in a long, long time – the options are bring something from home, go to the staff canteen, or walk round the corner to get something

The co-founders were convinced there was market demand; the next stage in the ideation process was figuring out how to capitalise on it. In essence, the solution lay in matching up food vendors with companies through a technology platform connecting employees to menu options.

The focus on data – Feedr uses intelligent matching and is moving to using machine learning to optimise individual menu choices, tailor the customer experience, predict demand for specific meals and ingredients more accurately, and help vendors reduce food waste – was instrumental in scaling the business: automating fulfilment enabled “a very lean team” to fulfil thousands of orders daily.

“To be really successful, you have to build a great team around you – you can’t do everything yourself”

Digital innovation

The technology was also instrumental in the sale to Compass, in a way that the founders did not foresee: “The sale actually came about because we had gone to Compass and pitched them to be a customer for our software suites to digitise their canteens,” Swanton says. “We were clearly in a market that was disrupting theirs and they needed that digital innovation.

“It was the first time that someone had really seen the value in purchasing the actual software suite we had built. It was an earlier sale than we planned – we hadn’t envisioned that we would be able to exit as early as we did, or with that good an exit to a trade sale – but we thought, ‘This is exactly the sort of player we want to exit to.’ There is a lot of synergy in thinking what our product could do as part of the Compass Group.”

Of course, most founders launch businesses with the eventual aim of selling them. But often when the opportunity for a sale arises, it can be hard to let go. Given that Feedr had not planned to sell so early, was it a very difficult decision? Not as much as one might have imagined, Swanton says: “As always, there was execution risk in staying as we were and raising a funding round and not taking the sale, and it seemed like a really good opportunity, even if it was earlier than planned. It crystallised a lot of the value for us and our investors, and essentially achieved what everybody building a startup wants: to grow it and then sell it, so it was a great opportunity.”

Compass believes the acquisition will greatly help to accelerate its digital transformation and currently plans to utilise Feedr’s software to roll out to corporate clients in the UK and Ireland, then explore European expansion.

Social impact

One serendipitous aspect of the acquisition that proved particularly pleasing to Swanton, who has an extensive background in the social-impact sector (including, most recently, four years as a trustee of a refugee and asylum-seeker charity, and three years working in HIV care and treatment in Swaziland), was an initiative in April 2020 to provide free Compass meals to vulnerable customers at home using Feedr’s technology. Flipping its usual business model on its head, Feedr also launched a home-delivery solution for existing customers and, as employees return to work, will deploy the technology to support social distancing through click-and-collect schemes in workplaces to eliminate queueing.

Social impact is clearly very important to Swanton. She says, “The social-impact angle that I bring to Feedr from my background is that we really want to champion food that is ‘good’ in every way – food that is good for you, food that is sustainable, food that is healthy and transparent, and food that is aware of its environmental impact, as it were.

For her, that means nothing less than, “helping to feed the world in a better way – healthier food, more awareness around food and where it comes from, and more awareness around people in developed countries. In the West, people are very disconnected to their food chains and whether our food systems will be able to feed the hungry world population as it grows. That is something I am really passionate about.”