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Green Smoothie Delivery Service Brings in Seed Capital in Wake of Good Eggs Downsize

August 10, 2015

Food e-commerce startups have been an increasingly popular source of deals among venture capital and angel investors in recent months as they flock to technologies aimed at bringing consumers closer to their food and its producers.

In fact, food e-commerce was AgTech’s biggest subsector for investment volumes during the first half of this year, according to AgFunder’s Midyear Report. And the sector’s popularity shows no signs of abating as a range of companies in the space have closed funding rounds in the last two weeks.

The most recent is Green Blender, a smoothie ingredient delivery company, which closed a $900,000 seed investment round on Friday in the form of convertible notes.

An alumnus of Food-X, the accelerator from venture capital firm SOSV, Green Blender attracted investment from SOSV, angel investor Lukasz Gadowski and angel venture capital firm Point Nine Capital(The deal increases SOSV’s exposure to the startup as the funder of Food-X, which invests up to $50,000 in each team in its accelerator program for an 8 percent equity stake.)

A US company, Green Blender sends consumers the ingredients for 10 smoothies including five smoothie recipes, each week. The ingredients are all organic and superfoods sourced from local farmers. Green Blender also hopes to educate is consumers on how its smoothies are nourishing the body, according to its website.

“Their benefits are endless: clearer skin, heightened mental clarity, increased energy, and weight loss. And, their nutrients are known to reduce the risk of cancer and heart disease,” reads the site.

SOSV investment partner and managing director of Food-X Shen Tong, said that helping people to “touch and work with their food” in a way that is promoting responsibility, heath and sustainability through the high-in-nutrient but low-in-calorie recipes, is a big draw for the investment firm and aligns with their thesis. “And it’s pretty disruptive to the industrial food market,” he told AgFunderNews in an email.

Point Nine Capital, which invested out of its current €55M Seed/Series A Fund, agreed that the nutritional aspect of the business was appealing.

“Although it might seem like a niche-y product at first, smoothies and juices are actually a pretty significant, growing market,” Nicolas Wittenborn, principal at Point Nine told AgFunderNews. “Moreover, we see Green Blender as a subscription company for healthy nutrition, so there are many ways the company could expand their offerings going forward, for instance by expanding into new product categories.”

Point Nine Capital III closed during the first half of this year to invest in internet-based companies that “want to use the internet disrupt large markets”, according to its website.

Also announced this week, Indian grocery delivery mobile application iOrderFresh, received a strategic seed investment from an investment company called Best Foodworks. iOrderFresh delivers across Delhi and is available in the App Store and at Google Play. Further details about the deal were not available.

A number of startup food delivery services have cropped up in India recently including hyperlocal logistics service provider Pickingo, which raised $1.3m in a seed round led by Orios Venture Partners last week, and high-speed food delivery service Opinio secured $1.6 million from Accel Partners towards its Series A round last month.

And in the US, the sector has been maturing after companies such as Blue Apron and Munchery announced $135 million and $85 million fundings respectively during the first half of the year.

But it hasn’t been plain sailing for all startups in the space. Last week Good Eggs, the San Francisco-headquarted farm-to-consumer delivery company, announced it was closing operations in Los Angeles, Brooklyn and New Orleans and reducing staff in San Francisco after “growing too quickly, to multiple cities, before fully figuring out the challenges of building an entirely new food supply chain”, wrote the chief executive in a blog post last week.

“What we didn’t fully understand when we started was that we were creating a new category that required a different approach to supply chains, logistics, and commerce – all of the pieces of getting food from local producers to the kitchens of our customers,” wrote Rob Spiro, founder and CEO on the blog. “It was, and is, complicated, way more complicated than we ever anticipated…As CEO I take full responsibility for any and all of our mistakes along the way as well as their consequences.”

Good Eggs last raised funding in November in a $21 million Series C round with commitments from large VC firms including Sequoia Capital and Baseline Ventures.

Green Blender is also spread between a variety of U.S. cities, currently delivering to over 10 states in the Northeast including New York, Connecticut, Delaware, Maryland, Maine, New Jersey, Pennsylvania, Rhode Island, Vermont, West Virginia, and Washington DC.

Reacting to the news about Good Eggs, Amir Cohen, co-founder of Green Blender told AgFunderNews: “Good Eggs has a great mission, and I hope they continue to be able to scale and expand. I think the biggest lesson we can learn from them is that changing the food industry and it’s infrastructure is immensely challenging. We’re working on a similar mission, but we’re focusing more closely on increasing consumer’s access to great ingredients while providing a healthy program for customers to actually incorporate those ingredients into their diets.”

In providing this access to healthy ingredients, Green Blender hopes to come up against what it calls “bricks & mortar juice and smoothie venues”. “We are working on turning that healthy intention you might fulfill from time to time at a smoothie shop into a lifestyle by providing access to great ingredients for a daily smoothie,” Cohen said.

SOSV invested into Green Blender through SOSV Fund III, according to Tong. It also recently invested into other Food-X startups including Servy, a mobile app for diners and Kitchenbowl, a social media site for foodies.

Food-X was launched by Tong in 2014 as the first international business accelerator program focused on launching food-related ventures with a long term, multi-stage fund, said Tong. It looks for early-stage food entrepreneurs that are aiming to disrupt areas of food & beverage, health, agriculture, and environment. It is currently accepting applications for the next round until September 30. Apply here.

“Food-X has helped us plug into the food+tech community in New York City, which has been tremendously helpful as we grow our customer base, work on business partnerships and continuously improve our product,” Cohen told AgFunderNews.

Point Nine Capital has invested into a range of food-related businesses before including DeliveryHero, Marley Spoon, Kitchen Stories and Cibando.

“Food startups are interesting to investors, because they serve a very stable need in a huge market,” said Wittenborn. “So there are plenty of opportunities to build really big companies here.”


Have news, tips or want to write a guest article? Email [email protected].

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