Evaluating only Karma’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. That’s exactly how it died.
Key Events Timeline
FOUNDING
Hjalmar Ek and Luis Olvido found Karma in Stockholm to create a marketplace for surplus restaurant food at reduced prices.
FUNDING
Raises $18M with Sequoia participation; expands to UK market; reaches 1.5M registered users across Sweden and London.
DOWN ROUND
COVID-era restaurant closures destroy supply side; reopening brings Too Good To Go with superior partner density and funding.
SHUTDOWN
Karma shuts down its app in late 2023; sells remaining technology assets to Too Good To Go; 1.5M users migrated.
Full Analysis
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Documented cause
Stockholm-based Karma, founded by Hjalmar Ek and Luis Olvido, built a marketplace for discounted surplus food from restaurants and cafes to reduce waste, raising $18M from Sequoia and others. Despite strong sustainability narrative and 1.5M registered users across Sweden and UK, unit economics remained challenged as restaurant partner churn was high. Post-pandemic restaurant closures decimated supply. By late 2023 Karma shut down its app, selling remaining assets to competitor Too Good To Go.
Lesson
“In marketplace foodtech, supply-side retention of restaurant partners is as critical as consumer downloads — model both rigorously.”