Canadian dairy supply chain SaaS company Milk Moovement has closed a $20 million funding round led by VMG Catalyst that will help accelerate product development and adoption across North America, the company announced in a press release on Tuesday.
What is Milk Moovement?
Launched in 2018 by co-founder Jon King and Robert Forsythe, Milk Moovement is a logistics platform designed specifically for the dairy industry. Dairy businesses can use its software to track milk shipments and product data in real-time.
The company, which has a U.S. headquarters in Minnesota, is aiming to integrate a “major digital transformation” to the $600 billion-plus global dairy industry, specifically with regard to fresh products with limited shelf life. Beyond tracking shipments, users can manage delivery schedules and “ultimately create a significant decrease in food waste and loss of profits,” the company said.
Milk Moovement’s current network is composed of 2,500 dairy farms across the U.S., Canada and Australia, with over 30 billion pounds of raw milk, or around 15% of the U.S. dairy market, passing through its system annually. Major partners include United Dairymen of Arizona and California Dairies, the second largest milk marketing cooperative in the U.S., which produces over 17 billion lbs. of fresh milk annually from 300 partner farms.
The cloud-based platform had previously raised $3.2 million in a round led by Dynamo Ventures, with participation from Bread & Butter Ventures, Matchstick Ventures and SOSV. Milk Movement has also received financial aid from the Government of Canada, which invested around $1.2 million in 2021 via Sustainable Development Technology Canada (SDTC).
In the U.S., Milk Moovement is facing a lawsuit from a similar dairy-focused SaaS venture, Dairy LLC, that alleges the company stole proprietary information related to its application.
Who is investing in the platform?
The sister firm of investment group VMG Growth, VMG Catalyst is focused on funding SaaS and other commerce-related tech services. Its past investments include Boulevard, a SaaS aimed at the salon industry, dog food delivery service Maev and online ethnic grocery store Weee!
In a press release, VMG Catalyst general partner Carle Stenmark explained that Milk Moovement’s impact is heightened given the “fragility of global supply chains and the corresponding impact on consumer goods.”
“Real-time data transparency is critical for managing perishables and provides tremendous benefit to all the constituents in the dairy value chain,” she said. “We’re looking forward to seeing even broader adoption of the company’s innovative software platform, and the positive change it creates for the industry.”
Richard Cargill, a member of the board of directors at agribusiness giant Cargill, is an existing investor who is also participating in this round.
Ecolab, a global leader in hygiene and infection prevention solutions, has made a minority equity investment in Milk Moovement.
What’s the supply chain big picture?
While supply chain issues have been at the forefront for CPG over the past two years, dairy operators face an even trickier situation in dealing with cold-chain distribution. Input costs like feed for livestock have been rising along with inflation, leaving farmers increasingly at risk, to say nothing of the roiling impact of the ongoing war in Ukraine. And that’s on top of an already complex regulatory environment in which minimum milk prices are controlled by the federal government.
As such, Milk Moovement offers a potentially valuable digital tool for dairy producers, co-ops and distributors to manage shipments, while aligning multiple producers under a single, transparent system allows them to streamline billing processes. But it comes at a cost: prices range from 2-8 cents per 100 liters annually, meaning it requires a level of scale to be truly effective. The value of unlocking efficiencies within that framework underscores in part why Dairy LLC is suing Milk Moovement; its claims relate specifically to the latter’s alleged theft of a feature that helps producers decide if they should “pool” milk purchases with other farmers at a fixed price, a common practice within the industry.
Other logistics firms have also identified dairy as an area ripe for innovation: Dutch company Lely recently announced a contract with Infor CloudSuite Equiptment to develop cloud-based supply chain management solutions for milk suppliers. New Zealand-based MADCAP offers a similar platform and counts Nestlé and Mondelēz International as clients.