John Mbindyo is the CEO and co-founder of Freshbox, a Kenyan startup focusing on avoiding food waste in East Africa by offering affordable cooling solutions (*).
What prompted you to launch?
I previously worked as a business developer for Shopa. We were involved in supplying shops with groceries and helping them with logistics/deliveries. As part of my job, I constantly heard most vendors say, “I wish we had fridges” to extend the shelf life of their fruits.
Hearing the need, I decided to act. I bought a 5-cribs capacity fridge for around USD 600 and brought it to market in Nairobi. Sellers used the refrigerator for half a day, so vendors would invite other vendor friends to share the storage capacity. Then more vendors started asking me for cold storage.
I decided to build a larger unit and that I was capable of figuring out how to make it. I started by educating myself (through many YouTube videos) and soliciting advice from friends and experts. I bought the necessary: framing, insulation materials, galvanized steel sheets, bolts, etc., and spent some months building what would become the first Freshbox unit. I had budgeted spending around USD 3k and ended up spending over USD 8k. I finally learned how to build a cooling unit, but I had no idea how to turn this knowledge into a business and immediately realized that any commercial efforts would require additional funds. So I started pitching my business idea and managed to complete the product. I went to Komaza, Kenya’s largest forestry company, and asked them for a job. Some of its employees ended up being my partners and initial investors and helped me complete a still working unit in Nairobi.
At this stage, we had achieved Freshbox v.1. Subsequently, we have learned vastly about design, product development, customer needs, and how to work with data.
– What problem(s) are you solving?
- Short shelf life: We extend the lifetime of our client’s products and avoid spoilage. We understand where spoilage originates, starting at the farm level.
- Market access: Our customers avoid loss of income by extending the lifetime of their products, but they are also capable of selling at better price points without so much time pressure.
- Financing: We offer a subscription model, which allows for the affordability of our cooling solutions. Most of the time, the subscription model enhances and even enables our sales; otherwise, any cool storage unit would have been “impossible to buy” for most of our clients.
– What is immediately next for your company?
We are currently focusing on growth. We are trying to reach more customers and allow more people to access refrigeration. We continue to focus on the affordability of our solutions to make them scalable.
– Which are / will be your products?
We have different product sizes, we have developed smaller solutions, and are highly competitive in this market segment. We will continue to promote pay-per-use to reach a larger number of potential customers.
Finally, we have introduced mobile units to be able to provide our services in all parts of the country. The mobile units answer a geographic need and, more importantly, cater to specific products’ seasonality. For example, we received a request from a tomato farm to provide our services for three months. We can do it with the mobile unit without incurring any installation costs. We build not only the cooling box but also the trailer to transport it. In the following months, we will be focusing on bringing down the costs for these mobile units.
– What is your business model?
We are basically in the rental business, although we also sell our cooling units. Long-term, we see the rental (pay per use) as a sustainable model. Generally, we rent each unit for 2-3 years, and during such a period, we collect a lot of data. The repayment period, of course, is much shorter, and we reach breakeven within a relatively short time.
– What’s your current greatest challenge?
We deal with new technologies, and we are not a software startup. We have a lot of customer education work ahead concerning the affordability of our solution and the benefits of avoiding food spoilage. We are lucky that there is more demand than the current manufacturing capacity.
We are also concerned about the lack of involvement by the government. To put it bluntly, we are entirely independent of any governmental policy (if there even is one for this area). What could help us is that the government encouraged or facilitated the installation of cooling units. Also of great help could be enacting a tax exemption for imported parts (such as compressors)—everything else currently is sourced from Kenya, including solar panels.
– Are you satisfied with your rate of progress?
Yes. We started with a shallow understanding of the problem and the market. We have constantly improved our products through our interactions with customers and vendors, yet we are not completely satisfied. You can certainly notice how much we have improved if you compare what you see today with how things were four years ago.
(*) I am a shareholder in Freshbox.