Every year, 1.3 billion tons and thus about one third of all food produced worldwide ends up in the trash – not only in private households, but also at producers, in trade and at bulk consumers. This is why the United Nations has set itself the goal of halving food waste by 2030. In the area of animal and plant by-products, the startup Byprotex from Frauenneuharting near Munich wants to make a contribution to this goal. With a digital trading platform, Byprotex connects producers and industrial buyers with each other, thereby creating new market and price transparency. In an interview, Dr. Andi Wieser, founder and managing director of the startup, which is part of the 5-HT network, explains how companies can use Byprotex to combat food waste and at the same time benefit from digitalized purchasing and sales processes.
What is traded on Byprotex?
Byprotex is a B2B platform for the trade in animal and vegetable by-products, proteins, fats and vegetable waste products from breweries as well as milk and dairy products. These by-products can be used, for example, for the production of animal feed, fertilizers, biodiesel or oleochemicals. Many people do not even know what a billion-dollar business is behind it – the current value of the entire potential market is 428 billion US dollars. So far, however, there is no global marketplace for animal and plant by-products. The market is completely undigitalized and intransparent, which not only makes the purchasing and sales processes very complex, but also results in a massive waste of food. To change this, we bring together buyers, sellers and traders on our platform to create global market and price transparency.
How was Byprotex founded?
Before founding the company, I was CFO of an international trading company specializing in animal proteins and fats. There I experienced how undigital the whole market is. Business is initiated by fax, telephone and e-mail. The whole day one is busy asking buyers and sellers what quantities are available or needed. In addition, a lot of food waste is simply destroyed because no buyer can be found quickly. This gave rise to the idea of setting up a digital platform on which buyers and sellers of animal and plant by-products can see directly which products are offered or sought in what quantities and at what location. I pitched this idea at a cofounder event in Munich and met two of my three co-founders that same evening. In February of this year we finally officially founded Byprotex GmbH. Since then, our platform has also been online.
Which advantages does it have to trade animal and vegetable by-products over a platform and not over brokers, as it is usual so far?
Brokers earn high margins of up to 40 percent when they resell products. By bringing buyers and sellers directly together on our platform, creating market and price transparency, we offer our customers enormous cost savings, as Byprotex only charges a fee of 1.5 percent per transaction. Furthermore, most brokers do not have a global presence. In contrast, we make it possible to search for new trading partners all over the world and thus go beyond personal business relationships. Furthermore, Byprotex is not only a marketplace, but also a partner that helps to digitize the entire transaction processing within the supply chain, for example through automated payment and document management. This digital process optimization enables our customers to save working time. Last but not least, we support companies in reducing global food waste in line with the United Nations’ goal.
How does the use of Byprotex work?
The platform is structured like a stock exchange, where you can place offers and requests. In the onboarding process we first check the tax number, creditworthiness, relevant certificates and EU 1069/2009 registration to make sure that all requirements are met. After registration, buyers can either bid on an existing offer or create a purchase request for a desired product on which suppliers can submit a binding offer. Initially, only the first two digits of the postal code are visible. Only when a sales contract is concluded will contact information be exchanged between the parties. In addition to pure purchasing and sales, our platform also integrates various services for our customers.
What additional services does Byprotex offer?
Our platform offers a total of ten helpful transaction-related services that can be easily digitized. For example, we offer central document storage and provide industry-specific market data and analyses. Our customers can also use the platform to process payments, take out trade credit insurance, check foreign VAT numbers, calculate logistics costs and commission logistics service providers. All documents are stored tamper-proof via the block chain. There is also the possibility to integrate Byprotex as a white label webshop on the own platform. Until now, there has been no other digital solution in the area of plant and animal by-products that combines all these services in one platform.
How big is the challenge to establish a platform that wants to fundamentally change the usual purchase and sales processes on the market?
This is indeed a great challenge. Current business relationships often go back many years, so companies are often unwilling to switch to more flexible processes with the help of a platform, even if this could save them money. In some cases, such as slaughterhouses, computers are not yet in widespread use, making it difficult to implement digital solutions there. In addition, some companies are afraid to disclose information about themselves on a platform, even if the information is anonymized at Byprotex. But it is only a matter of time before digitalization also becomes established on the market for animal and plant by-products. After all, the platform enables our customers to save a considerable amount of time and money.
How does the corona crisis affect Byprotex’s business?
The corona crisis has hit us hard. At the beginning of February, we founded Byprotex GmbH after receiving the commitment of our first lead customer, Berndt GmbH. But shortly after that came Corona. The international trade with by-products has decreased significantly during this time. Many large companies are interested in our idea, but currently have no capacity to deal with new solutions due to short-time work and other problems. We already have about 50 users on the platform, but currently there are hardly any offers because our customers prefer to rely on their established business relationships.
What are the next goals for Byprotex – and how can 5-HT support you?
Now it’s all about bringing volume to the platform so that trading really takes place there. We are also looking for investors who want to invest in Byprotex or who may be interested in a takeover. Ideally, a company builder who has the appropriate networks and can help us to win customers on the sales side would be ideal. Since 5-HT has good access to various companies in our field, it may be possible to find new customers in this ecosystem. On the investor side, 5-HT may also be able to connect with network partners who would like to participate in our platform.