Following a big lockdown tailwind, meal kit delivery startups were valued at a combined $10 billion last year, with growth of 13% CAGR expected from 2021 to 2028. But even with these favourable market conditions, there are winners and losers.
US-based Blue Apron, was valued at $3.3 billion at IPO in 2017, but by the beginning of 2020 Blue Apron had a market capitalization of just $85 million. Although its stock price increased during lockdown amid expected sales growth, the company is still yet to turn a profit, and both revenue and the number of customers have declined year on year.
Meanwhile German-based rival HelloFresh saw orders increase 98% in 2020, revenue increased 107%, and AEBITDA increased more than 10x. Tellingly, 55% of HelloFresh's revenue comes from Blue Apron's home base, the United States.
Beyond those two companies, there has been a lot of activity in this increasingly diversified category. So far in 2021, global VC investment has reached €335 million, a 3x increased versus last year. There has also been innovation on the product offering to target specific segments, e.g. Simple Feast and Allplants offering plant-based and vegan meal kits, respectively. Big food is also betting on the category. Nestle acquired Mindful Chef (undisclosed amount) and Freshly ($1.0 billion). Kroger's meal kits delivery service, Home Chef, have surpassed $1 billion in sales.
Restaurant kits, farm-to-table startups and rapid grocery delivery are all jostling for similar space in hungry consumers' homes.
🇺🇸 BIOMILQ, a US-based cell-based human milk company, raised $21 million Series A to scale its production process. The company was founded last year by two female entrepreneurs, Leila Strickland and Michelle Egger who targeted only funds who have female partners and have at least 10% of their portfolio companies with founders from non-traditional backgrounds, The Spoon reported.
🇨🇴 Foodology, a Colombia-based virtual restaurant company, raised $15 million Series A to scale across Latin America. It currently operates 20 kitchens in Colombia and 10 in Mexico. In Latin America, consumer foodservice a $200 billion industry. Although the US is a much larger market, demand for food delivery in Colombia and Brazil is larger according to Euromonitor. There are already well-capitalized and established players like Rappi and iFood. However, there is room for growth for other startups too. Food delivery startups, other than Rappi and iFood, have received €280 million in 2021 alone.
Other notable foodtech deals from around the globe:
🛒 Walmart is gaining on Amazon in Ecommerce via Forbes.
🥦 By the numbers: plant-based food sales and prices via Fooddive.
🍔 University of St. Gallen's alternative protein academic paper using Dealroom data.
💸 Unilever goes all-out on pricing as inflation accelerates via Bloomberg.
🎫 #FoodTechMondays: on November 8th, Semi Hakim and Ivan Draganov will cover the latest trends in online delivery. Get your ticket here.
💼 We're hiring! If you are interested in delivering industry-leading research (or working in product, sales or marketing), check out our jobs page, or reply to this email.
Tip of the week
Have you ever wondered how much capital startups who graduated at Y Combinator, the premier startup accelerator in the world, have raised? Well, now its possible. In 2021, VC investment in the portfolio companies of YC stands at €1.3 billion.
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