Montreal-based Relocalize has announced the second closing of its $2.3 million seed funding round to help prepare its autonomous production platform for growth. With the closing of its seed extension on Wednesday, the company has raised a total of $5.8 million since September.
Relocalize’s seed extension funding round was spearheaded by Desjardins Capital, with ongoing support from initial seed investors, including i4 Capital, Waterpoint Lane and RGS Ice.
The clean-tech startup aims to eliminate the need for middle-mile transportation by replacing trucks with fully autonomous, container-based microfactories that produce food and beverage products hyperlocally at grocery distribution centers.
Relocalize’s first product is packaged ice for retailers, which it is currently producing at the company’s pilot microfactory in Jacksonville, Florida. The pilot is a partnership between Relocalize and supermarket company Southeastern Grocers.
“What we’re doing essentially is decentralizing production,” D. Wayne McIntyre, CEO of Relocalize, told FreightWaves. “Packaged ice manufacturing tends to be regional, sort of like bottling or other products made of water. Ice is made in these larger facilities, and they’re transported from those facilities, middle mile to the distribution center, or sometimes direct-to-store deliveries. Our vision is really that we’re going to decentralize that production. Every large distribution center will have its own Relocalize microfactory located there.”
By decentralizing production, Relocalize is able to eliminate 100% of middle-mile transportation and de-risk supply chains for retailers that are able to produce ice on demand, McIntyre said.
“In order to make the microfactories work, we actually have to do all the things you do in a large factory on a micro scale, which is about a 5% scale,” McIntyre said. “To make the microfactories efficient from a labor perspective, we have to do something very new — autonomous factories. We’re really at the bleeding edge of manufacturing, in particular for food, because we’re not just making it smaller, not just automating it, we’re making the microfactories fully autonomous to run effectively 24 hours for the retailers that are producing on demand.”
Relocalize picked package ice as its first product because it’s an $8.5 billion market essentially controlled by regional monopolies, McIntyre said.
“The ice market is unique in a couple of ways. One, it’s really a true commodity market. It’s dominated by geographic monopolies. Most retailers only have one choice. So the commercial dynamics of packaged ice are quite unique,” he said. “We do have a patented process for making ice the way we do that offers a significant barrier to entry from either the existing competitors or new competitors.”
While the first product is packaged ice, McIntyre said the company’s autonomous microfactory platform is flexible and can be used to produce other food and beverage products.
“This model that we’re using, we believe works very well for beverages as well,” he said. “Packaged ice is a great beachhead for us. But to be frank, our vision is not to stay just in packaged ice. That’s just where we are starting.”
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Relocalize’s seed round extension funding follows the first seed round closing of $3.5 million in September, led by i4 Capital, a Quebec-based deep-tech fund; Waterpoint Lane, a Toronto-based impact fund; and RGS Ice based in California.
Nathalie Bernard, COO of Desjardins Capital, said Relocalize’s mission aligns with her firm’s goal of reducing carbon emissions across industries.
“Relocalize’s vision is to provide solutions to reduce the environmental impact of food and beverage production and transportation,” Bernard said in a news release. “This investment is consistent with Desjardins Group’s objective of achieving, by 2040, a net-zero emissions balance sheet on its extended operations and on its equity financing and investment activities in three key carbon-intensive sectors: energy, transportation and real estate.”
The latest funds will be used to double Relocalize’s engineering team in the coming months to meet strong demand from retailers in the packaged ice market segment, McIntyre said. The company currently has 11 employees.
McIntyre co-founded Relocalize with Graham Campbell, the company’s COO, in January 2021. McIntyre has been working in the technology industry for about 20 years and said he is passionate about decarbonization and reducing the impact of supply chain emissions on the environment.
“Decarbonization and the environmental impact is something that’s always been a big part of my life personally,” McIntyre said. “The goal of this startup was, ‘How do I make a difference and bring those personal passions for decarbonization to my business efforts? How do I align my personal goals, my professional goals, together, so we can build a great business, and at the same time make some productive changes that’s good for the planet, good for people, good for grocers.”