Why did a waste collection company receive an investment of 58.5 billion won?
Date
Nov 10, 2025
Classification
- Startups
#
- Success/Failure Analysis
Why did IKEA invest 58.5 billion won in a 'food waste' collection company?
🫑 3-Line Summary
•
RECO, a food waste collection startup, has attracted 58.5 billion won in investment with a data solution that resolves customer anxiety rather than simply improving logistics.
•
The real problem for restaurant owners was not 'collection' itself, but the lack of transparency regarding waste volume, doubts about costs, and legal anxiety about administrative processing.
•
To address this, we introduced IoT sensors and an automated reporting system to sell 'trust,' resulting in a phenomenal churn rate of less than 1% and transforming the low-tech industry into a high-tech platform.
🥦 Insight
•
Customers buy 'peace of mind,' not 'function.'
•
"We are 10% faster than our competitors," "We are 10% cheaper." Are you currently marketing with phrases like these? To be blunt, while that may scratch the customer's 'itch (symptom),' it cannot cure the 'pain (cause).'
•
The reason Ricoh's case is great is that they increased their **'data'** instead of increasing their trucks. They realized that what customers truly fear is not 'dirtiness,' but 'trickery' and 'punishment.' The moment they presented invisible waste output as transparent numbers, those figures ceased to be mere data and became the most valuable asset: **'trust.'**
•
Re-examine your business. What is the **real anxiety** that customers feel while using your service? Eliminating that anxiety is the key to creating tenfold innovation, not just a 1% improvement. Are you currently selling bandages to cover symptoms, or are you performing surgery to cure a disease?
— View original —
Are you only fixing the 'symptoms'? Or are you solving the 'real problem'?
In March 2024, a startup in Seoul secured 58.5 billion won in investment. The investor was Ingka Investment, an investment arm of the Ingka Group, which operates IKEA.
However, what is interesting is what this company does. It is food waste collection.
You might think, "What's so special about that?" After all, food waste collection companies are common everywhere in South Korea. However, the 'Upbox' created by this company, RECO, was something different.
This story is a perfect example of how 'problem definition' changes the fate of a business.
Rico CEO Kim Geun-ho also initially started a typical food waste collection company. It was a model where they collected food waste from restaurants, transported it to a processing plant, and received a processing fee.
We did the same for a year, just like the existing companies. We were no different from ordinary waste disposal companies. However, during that process, we discovered something strange.
What was the 'strange thing' they discovered?
The fact is, the restaurant owners' real concern was not "cleaning up trash properly." Although Ricoh tried to collect trash faster and more neatly, customer satisfaction did not improve.
The customer's real problem was not the symptom of 'garbage collection'.
Want to read this article to the end? Click!
Please click (touch) the link block below.
Go to the platform where the article was written.
(* Separate registration may be required depending on the platform.)