Mario Arabov, Chief Growth Officer (CGO) of foodcircle is an experienced leader who served various Berlin-based startups. In the latest episode of Leaders to Leaders, he keenly opened up on the famous local startup ecosystem, the efforts behind changing the habits and introducing new tech opportunities to food entrepreneurs.
Why is Berlin Bursting with Startups
The whole vibe of the city, the whole art scene, music scene and tech scene made it possible to become this amazing epicentre. Of course, everything is changing recently, especially due to a huge gentrification process, huge companies moved here, [including] Google, he says. This, on one side attracted many talented people but on the other side made it also very expensive to live and find office spaces.
Shifting the Business Focus
Foodcircle, which he joined a little after its founding, was initially a platform to connect suppliers with food traders. In the course of time, they realised that entrepreneurs have a bigger problem than just finding the right ingredients online. They need easy access to financing, especially through better terms with their own suppliers. So they built an “amazing” procurement platform, featuring financing services.
New Service with the Same Core Product
In the industry, usually customers don’t have payment terms, they need to pay in advance or in 14 to 30 days. So the whole process of getting better payment terms has been done through banks, but it is a bureaucratic and tedious process. And suppliers are risking their own liquidity.
Most of them don’t even know that there is a chance not to pay in advance and hence they are really growing slow. If they have a better cash flow, they would be able to invest more in their production and increase growth. So this is where foodcircle could allow them to access this financing in an easy and digital way and bring value to both customers and suppliers.
So I think the whole functionality of products needs to be readapted but the core product didn’t change much, because we already have a very solid procurement, Mario says.
Innovating the Food Industry
The whole food manufacturing industry, especially the B2B one, is so old-fashioned that it is really hard, those people are really still dealing with faxes. We are also still heavily relying on the Sales team, Mario says. For most of them, they still need to rely on more traditional approaches, so going to fairs, doing emails, and cold calling is still very important. But I feel that with Covid the whole industry had a very big acceleration towards technology and seeing also other companies.