DueDash Cologne is sharing the stories of exciting startups from the region to enable you to learn from their successes and become investable and consumer-focused businesses as well. In this interview, we talked with VYTAL founder Sven Witthoeft. He tells us how they are reducing plastic waste, quickly scaled their team, financed their business, and more. Below the video, you will find a written transcript of the interview.
Update: VYTAL at Die Höhle der Löwen (German Shark Tank)
The two co-founders Sven Witthöft and Dr. Tim Breker fought hard at “Die Höhle der Löwen”, the German version of Shark Tank and managed to get an overall investment of 450,000€ for 12.5% of their business from investor Dr. Georg Kofler Congratulations for a great presentation and impressive bargaining! Let’s take it from Cologne to the world, guys!
Dr. Georg Kofler: “You are one of the best founders I have ever seen in this show.” – “This business has the chance to be worth half a billion in 2 years” – Nothing more to add!
Elevator Pitch
My name is Sven, I’m thirty-one years old and I’m one of the founders of Vytal. We offer reusable packaging as a service for restaurants, canteens, supermarkets, and corporates to eliminate plastic waste. Our mission is to make reusables as easy and as convenient, as single-use, but better! Higher quality packaging, 100% leakproof, microwave safe, dishwasher safe, keeps the food warm and nothing leaks at no extra cost without packaging waste and extra benefits for partners and consumers.
So you can collect discounts from our partners and you can preorder your food and get everything in those very nice containers. I think for us, we really came from the impact perspective, we looked at the problem and we were always very driven by creating impact, working on the big topics in society while still at BCG (BostonConsulting Group) we also did a lot of work in the public sector and social impact projects and we looked at the big problems that we had as consultants.
We ordered often food as I worked a lot in the UK and there was so much waste. When you stop eating with one team, the trash bin was overflowing with single-use plastic and you thought, no one likes to eat from those and why isn’t there a better alternative? And so we looked around and couldn’t find one and said, maybe there’s a space. And we started talking to a lot of people, potential customers from restaurants, consumers. We noticed there’s really a need for this. And then we just started.
How did you convince both customers and consumers for your product at the same time?
I mean, we face a typical chicken-egg problem, we need to have partners, restaurants, canteens that offer our service to consumers and then, of course, have consumers pick it up at the restaurants and use the system. Otherwise, they will stop working with us. And we did in a sense that we said, we’re going to look for the best use case that we have, which is business lunch, people that go out every day to grab the food elsewhere and they are annoyed by the packaging waste.
And we asked where do these guys go? I mean, these were people like us. Where do we go? Where do we like to eat? And we talk to those five restaurants where we started and said, why don’t you start with us, try the system and we bring you the first customers. And then we iterated from thereon. And now we have created this network and I think we try to offer more restaurants to get more consumers. So start with the restaurants and then get more consumers.
And now as we working with corporates, we have a really compelling offer for them because they can offer their employees an opportunity to behave more sustainably and at the same time improve their CSR reports and do really something that has an impact. And with that, we can talk to the surrounding restaurants and convince them to take part in the system, because this company sends people out every day to consume food and they want to doit packaging waste-free.
How does a startup build their logistics network?
We’re trying as a startup to stay as lean as possible and as light as possible, but in our case, we can avoid having some kind of logistics, making sure that our partners always have the right number of clean bowls at the outlet available for customers. So we have a live dashboard where we see all the transactions and see all the inventory levels that at our partners and we use our sales and operations team to redistribute between partners.
But the basic logistics is that customers take back the packaging to the outlets where it’s cleaned in their commercial dishwasher. So a lot of the logistics is actually done by our customers themselves. But we now offer with REWE and other retail players, we offer central logistics. So we take care of packages that were returned at the REWE outlet in a return box. We take care of those, bring them to a canteen operator that we work with.
And the good news is for us is that we have a really dense partner network already that we can work with and that our experience in treating food containers and we fully trust them so we can integrate them in our network and we build it up step by step and try it, but try to minimize transport as much as possible. And if we need to transport things, we do it with an electric bike.
What is your business model?
We have a really simple business model that’s very impactful because we make money when we avoid packaging waste. So every time one of our partners fills in food in a reusable container and hands it out to the customer by scanning the QR code on the lit and the QR code on the app, we get a transaction fee, which can be 15 to 20 cents, depending on the size of the container from those partners.
So every time they save packaging waste and safe packaging cost, they pay a part to us and we earn with every transaction. And of course, when we offer to preorder, we also take a share of the revenue that they make. So we take a commission. But the basic model is whenever we avoid packaging waste, we make money.
How did you become Germany’s fastest-growing startup?
When we started in September last year with five partners here in Cologne, everything was very easy. We knew all our customers. We knew all our partners. And of course, during corona times, it was a huge demand for our product because everyone was now doing takeaway and everyone was fed up with all the waste that was produced.
Packaging waste volumes went up by 10 percent. And so everyone was looking for a solution while we were all in lockdown. We tried to build up a team remotely in the different cities in Germany, we are now in almost 20 cities in Germany, while at the same time trying to establish that company culture, which of course was a challenge because we couldn’t see each other in person and a lot of the team hasn’t actually met in person.
So we have met a lot of them, but they don’t know each other all the time. So we try to establish that company culture via virtual meetings, via a really active Slack channel where we celebrate success via personal meetings. But of course, it’s a challenge. But we’re really fortunate to have team members, coworkers that are really driven by the same passion for impact as we are. And they all believe in the business model.
They see this huge mission to make reusable as easy and convenient as single-use. It’s really a driver for the. So it was pretty easy for us to find motivated team members to work for us and drive our mission. But of course, there are challenges to managing that growth, because we went from basically three or four people in March to over 20 now in September, and this everything duringCorona times remote. So it wasn’t easy, but I think we managed all right.
How did you finance your business?
In the beginning, we bootstrapped because we wanted to validate the idea and we knew that there was something in there in this space, reusable packaging, but we weren’t sure what exactly it was and what the business model could look like. So we took our savings, get the first prototype out, bought the first bowls, and started talking to outlets to really onboard them, and make the first transactions.
We were lucky that we got a scholarship from the state, Gruenderstipendium NRW, that supported us, our living expenses a bit. And until March we basically financed everything ourselves. And in March we were really happy that we’ve been awarded the exist stipend, the largest scholarship from the state that pays three of our founders.
And we also did an angel round afterward, where we collected a bit of money to really drive tech development and drive expansion because at that point we were already pretty certain that we found the product-market fit, but we just needed more capital to expand.
And now that we’ve grown from five partners in Cologne to over two hundred in the twenty largest german cities. I really see a lot of traction in the canteen segment started with supermarkets. We’re actually looking to race for another round, pre-seed round to drive further growth in Germany, and really bring reusables to more and more people.
Your main advice to entrepreneurs is?
I think my main advice would be just do it if you have an idea, try to go out there, test it with customers. It’s the most rewarding and the most insightful thing you can do because you will learn so much by talking to potential customers, give them a prototype, give them a bowl that you bought in the department store. We started with printed QR codes on paper. People had to sign up on an iPad, Google sheets for them to get them.
But we already had the prototype because every car had an individual QR code on it so we could test the digital system. Our partners had to scan. So try to go out as quickly as possible to validate your ideas and fine-tune it from thereon. And if you are in a job and think about the impact startup that you always wanted to create, try to do it in your free time, start talking to your friends, start talking to potential customers and build on that. And maybe there something and then you can switch when you already validated a lot of the things that you need.
