Cayman company Nilus tackles food insecurity with technology

A Cayman Islands-based company is developing technology to target food insecurity in so-called food deserts – urban areas that have no access to healthy foods at affordable prices.

Nilus, which has been operating for three years in Buenos Aires and Mexico City, initially set out to build a sharing-economy model to rescue food waste by having private drivers pick up food and deliver it to community kitchens and shelters.

The company now uses technology to procure high-quality food and groceries that would otherwise be discarded for aesthetic reasons, packaging defects or because they are about to expire.

“We are distributing basic groceries, mostly food to low-income people because they live in food deserts that don’t have access to reasonably priced, healthy products,” Ady Beitler, co-founder and CEO of Nilus, told the Cayman Compass.

Taking out the middlemen, Nilus buys those products directly from farmers and producers and distributes them to low-income families through community group buying networks.

Because the purchases are consolidated and placed in bulk directly with suppliers they receive volume-based discounts, and the prices consumers pay are up to a third lower than they would be in convenience stores.

Farmers are normally unable to sell fruit that is visually less appealing but otherwise has the same quality as the produce bought by wholesalers. It is estimated that almost a third of the world’s food is discarded and wasted.

For farmers the service is a win-win. Perfectly edible fruits and vegetables that do not satisfy the aesthetic standards of large supermarket chains and other wholesalers would normally either go unharvested or be thrown away.

Products like baby formula, that are close to their expiration dates, are often rejected by wholesalers because of their longer order cycle.

“Because we have a 48-hour delivery capacity anywhere in the places where we operate, we will sell those products, but at a discount,” Beitler said.

For consumers in low-income areas, it means foods and other products that are ordinarily overpriced, due to a lack of supermarkets, or not stocked at all by small ‘mom and pop stores’, are now available at reasonable prices.

Customers collect their food orders at centralised pick-up points, organised by community members who work for a commission. – Photos: Nilus

They can either be ordered online or through community members, who place purchases and distribute them at centralised pick-up points to save costs on last mile delivery – transporting the items to the customers.

“Those deliveries are handled by women who are members of the community that we entrust with customer support for our local clients in the organisation of the last mile delivery,” Beitler explained. “And we we pay them a commission on sales for the services. So we’re also creating jobs in the community.”

Fintech and Cayman

Currently, Nilus is employing more than 100 people, from community leaders and delivery drivers to software engineers.

The company is seeking to build a tech team in the Cayman Islands, under the leadership of its chief technology officer, Ruben Sosenke, who pioneered the development of one of the largest e-grocery platforms in Latin America, PedidosYa, which was acquired by online food delivery service Delivery Hero.

Ady Beitler

Beitler said creating a new market for low-income people from scratch means Nilus has to build the entire infrastructure and value chain for that market.

This includes creating the financing mechanisms for people to pay.

“Nilus is developing technology to evaluate the creditworthiness of its customers based on their purchasing habits. We are giving credit to low-income families by financing their access to food and basic groceries,” Beitler said.

Developing the technology to give its users access to credit and remittances from abroad is where Cayman comes into play.

Nilus aims to develop the proprietary fintech platform and domicile it for the company’s global operations on island.

Combining Cayman’s financial services experience with the e-commerce talent of Nilus will lead to financial innovation that includes the poor, Beitler said.

As soon as the company is properly set up, Nilus wants to hire Caymanians.

“We have the confidence that we have the know how and the capacity to train people in the tech. If you combine very senior, experienced engineers with young people hoping to learn the trade and evolve with us, then that’s a very efficient way of building a tech team these days.”

Investors supporting next growth phase

Until now Nilus was funded by individual investors and corporate donations from the likes of Google, Facebook, the Siemens Foundation and German software corporation SAP.

As the company is seeking to scale and expand into other cities in Mexico, into Guatemala and the United States, new investors have come onboard.

The company received a first round of US$5 million series A funding from members of Respada, an invitation-only platform that provides private market opportunities to family offices and the ultra-affluent.

John Prince, Respada

John Prince, CEO of Respada, said all the family investors on the platform have philanthropic goals and values that align very well with Nilus’s mission to eradicate hunger and address food insecurity.

Nilus is also empowering women leaders in the community and giving them a livelihood by using the resources that are available to make the deliveries happen.

“That’s like a noble cause that every family within our platform is excited about,” he told the Compass.

Prince said the company stands out not only because of its social impact and its experienced management team – Nilus was incubated at the Harvard Innovation Labs by Harvard alumni – but also from a financial investment point of view.

Looking at the growth trajectory that Nilus has achieved so far and extrapolating it into the future, he said, the company has the potential to become the first unicorn (a privately held startup company valued at over $1 billion) in the social impact space.

This round of funding will support Nilus in strengthening its community group buying solution, as well as in building the Cayman-based fintech platform.

At this stage, Nilus has 5,500 recurring customers per month. But given that many of the community buyers are churches and schools, the company is reaching about 250,000 people each month.

And the need is not getting smaller. The war in Ukraine has driven up grain prices all over world. Prior to that, it was the COVID pandemic that posed major challenges to sourcing and delivering healthy, affordable food. And before that, food prices were rising as a result of climate change.

“We built a company that is designed to resolve one of humanity’s most pressing problems that, for one reason or another, always keeps getting more pressing,” said Beitler. “And that’s why we’re so proud of the impact we are representing for our communities.”

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