Algramo Raises $8.5M to Fight Plastic Waste with Reusable Containers

The Challenge of Single-Use Plastics and Algramo's Innovative Solution

A significant portion of global waste is comprised of single-use plastic containers, yet a viable, consumer-friendly, and economically feasible alternative has remained elusive. Algramo presents a potentially groundbreaking solution, combining reusable containers with a strategically designed distribution network. This approach not only reduces waste but also generates cost savings, and the company is poised for substantial expansion following a new $8.5 million funding round.

A Growing Need for Sustainable Practices

Established in Chile almost ten years ago, Algramo is gaining momentum as businesses across diverse sectors face increasing pressure to adopt environmentally responsible practices.

Reducing reliance on single-use plastics – prevalent in items ranging from cleaning products to beverages – is a key area for improvement. However, implementing such changes without increasing costs for consumers presents a considerable hurdle. An eco-friendly product that doubles in price will likely only appeal to affluent buyers, leaving budget-conscious consumers with the less desirable, cheaper option.

“Consumers are often forced to choose between their finances and the health of the planet,” explains CEO José Manuel Moller. “Therefore, our solution must be both more affordable and more effective. We aim to simplify processes rather than complicate them.”

Image Credits: Algramo

How Algramo Works: Refill, Reuse, and Reduce Costs

After extensive testing, Algramo’s solution involves a modified label for existing products, such as detergents or shampoos, incorporating an RFID tag. This allows consumers to conveniently refill their bottles at designated dispensers.

By offering products at bulk prices and eliminating packaging costs – estimated at 30% of the product’s price by Moller – Algramo provides a cheaper alternative, requiring only a visit to a different shelf within the store.

The true innovation lies in establishing partnerships with major brands. Consumer convenience is paramount; driving to a separate store solely to refill dish soap is unlikely to encourage adoption. Similarly, limited refill options consisting only of lesser-known brands will likely prove ineffective. Algramo successfully demonstrated the value proposition to large corporations like Walmart and Unilever, and these companies are beginning to respond, particularly at the local level.

“This shift was inevitable, with or without Algramo’s involvement,” Moller asserts. “However, we are integrating into their existing supply chains, collaborating with both retailers and brands to avoid disrupting established relationships. Furthermore, bulk ordering results in approximately a 60% reduction in storage space for these companies.”

Strategic Partnerships and Expanding Reach

Current arrangements are in place with Unilever, Nestlé, Colgate-Palmolive, and Walmart Chile. By delivering a comprehensive solution that benefits brands, retailers, and consumers through cost savings, Algramo has created a mutually advantageous system.

While initially utilizing a fleet of dispensing vehicles, the retail-based approach has proven more successful.

The vehicles still exist, though, as this kid is happy to emphasize.

Currently, Algramo stations are operational throughout Chile, serving around 50,000 users who regularly purchase products in bulk. These products are selected based on their environmental impact, with the most polluting items prioritized. Beverages are identified as the most significant polluter, presenting a unique challenge that the company is actively addressing.

Alongside frequently used items like laundry detergent and toiletries, even dry dog food is available for bulk purchase. Algramo ensures accessibility by allowing customers to buy any quantity they need at the reduced bulk rate, catering to those with limited financial resources.

Global Expansion and Future Plans

The success in Chile has validated the concept, leading to a new funding round to support pilot programs worldwide. Projects are underway in Jakarta, New York, Mexico, and London, each requiring localized adaptation due to varying regulations, subsidiary structures, and distribution networks.

The $8.5 million Series A funding, led by Mexico’s Dalus Capital, includes participation from Angel Ventures, FEMSA Ventures, Volta Ventures, Impact Assets, University Venture Fund, Century Oak Capital, MIT Solve’s investment arm Solve Innovation Future, and Closed Loop Partners’ Ventures Group (which led the 2019 seed round).

Moller acknowledges the existence of similar initiatives but believes Algramo’s platform has the potential to be compatible with others. Maintaining strong relationships with both retailers and brands, and with the customer, is crucial, while the final delivery method can be adapted to specific circumstances.

For example, leveraging existing reverse logistics systems, like the reusable food container programs common in India, could be beneficial. Alternatively, if a grocery chain develops its own hardware solution, Algramo is open to operating as a behind-the-scenes partner. (The company also holds several patents.)

Currently, Algramo is focused on establishing its presence in key markets. Consumers in the aforementioned locations should look for Algramo stations at their local retail or grocery chains, or consult the map on the company’s website.