Dealmakers: Cream rising to the top

The Modern Milkman’s round is growing fast as it looks to deliver on a global scale.

The Colne based online grocery service has secured a £2.25m investment as part of wider fundraising plans to support its ongoing scaling and sustainability efforts.

The cash injection from Praetura Ventures is the latest stage in a remarkable business journey that began with a few friends, an acclaimed television documentary series and a single milk round in Pendle.

Modern Milkman began life in 2018 and today it operates 16 hubs across England, with another office in Lille, France.

The business works with independent suppliers and farmers to deliver grocery products, including eggs, yogurt and bakery items as well as fruit and vegetables.

The Modern Milkman has saved more than 46.5 million plastic bottles so far with its modern twist on the traditional ‘milkman’ delivering groceries in returnable and reusable packaging, all of which is plastic-free.

The market is grocery but make no mistake - this is very much a tech company. It uses intelligent data and analytics to map out milk rounds, assess demand and reduce carbon emissions.

The business works closely with decision intelligence firm Peak AI, another Praetura portfolio company, to combine information, such as shelf-life dates, customer ordering patterns and warehouse data to ensure customers receive deliveries on time with minimum waste in the supply chain.

It is an approach that has caught the eye, singled out the business for big things ahead, and led to it scooping the overall judges award and fastest growing company of the year category in this year’s GP Bullhound Northern Tech Awards.

Simon Mellin, a founder and the chief executive of Modern Milkman, had previously worked with grocery brands such as HelloFresh. He comes from a strong Lancashire farming and food background.

He says: “As a business proud of our Northern roots we’re thrilled to have secured the support of Praetura Ventures for the next phase of our journey.

“We’re excited by the opportunity to collaborate and learn from them and their impressive portfolio of tech businesses as we continue on our objective to achieve the scale and consumer loyalty that we need to realise our vision to reset our throwaway society.”

The Modern Milkman started life as one round in Pendle. The idea was sparked by Simon and friends watching Sir David Attenborough’s acclaimed Blue Planet documentaries and the obvious need to reduce plastic waste.

The business says its mission is to “revolutionise consumer habits” by delivering fresh ways to return and reuse packaging, shop ethically, and feel good about convenience.

Its milk rounds deliver three times a week and are easily managed online so that shopping sustainably is convenient and accessible.

The Modern Milkman began raising institutional cash at the start of the decade. In January 2021, ETF Partners (The Environmental Technologies Fund) announced a £5m investment in the business to enable it to accelerate growth plans.

And in June 2021 it announced the closing of a funding round led by global venture capital and private equity firm Insight Partners. ETF and serial investor Simon Murphy also participated in the round.

Jeff Lieberman, managing director at Insight Partners, said at the time: “Consumers are reassessing their consumption, and they expect the businesses they buy from to help them on that journey.

“The Modern Milkman combines a focus on great customer experience with a business model that is suited to significant expansion to meet the needs of customers across the UK and beyond, and we are delighted to be supporting the company on the next stage of its growth.”

It was reported that the funding would be used to increase research and development, as well as supporting the business’ continued growth in the UK. It was also being used to expand The Modern Milkman team, enabling it to develop innovative ways to package fresh groceries in return and reuse packaging.

The latest Praetura Ventures deal was announced in July this year. It takes the total number of businesses in the Manchester based venture capital firm’s portfolio to 28, with Modern Milkman joining several other successful tech companies.

Praetura invests in early-stage, high-growth businesses across the UK, with a particular focus on supporting entrepreneurs across the North of England.

It recently announced £125m in funding raised since launching its maiden EIS fund, The Praetura EIS Growth Fund, in 2019.

David Foreman, managing director of Praetura, says: “We are far from alone in our admiration of Modern Milkman, which has grown at a highly impressive pace and is now eyeing global expansion.

“As well as the company’s unique and innovative approach to the grocery sector, what attracted us are its highly authentic sustainability pledges and plans to significantly curb plastic use.

“The business and its founder Simon represent a new generation of Northern businesses, that are transcending sectors and putting the region at the forefront of UK innovation.”