Food delivery services are continuing to capture the attention of the venture capital community after home cooking meal kit delivery service Plated closed a $35 million Series B round last week. Existing investors Formation 8 and Greycroft Partners led the round.
Launched in 2012, the New York-based company thoughtfully selects an exciting array of recipes and ships a box containing all the necessary pre-portioned ingredients to prepare the meal right to its patrons’ doorsteps.
Although Plated’s service may come with a larger price tag than other delivery meal kit services, the company boasts one of the most diverse menus in the game. The menu, featuring over 1,000 different items, offers an elaborate array of selections, including some high-end items like seafood and beef. Besides the ingredients, the options are divided into different culinary skill levels, allowing users to start off where they feel comfortable and cook their way to a more sophisticated skill set.
The company has also set itself apart by making sustainability and responsible food sourcing one of its main tenants. “This means sustainably-sourced seafood, a generous helping of seasonal fruits and vegetables, and meat raised without antibiotics or added hormones,” reads Plated’s website. “We avoid processed and artificial foods, because quite simply, the whole and healthier stuff tastes better.”
For its seafood offerings, the company has paired up with Sea to Table, which provides an array of ocean fare that is guaranteed domestic and sustainably farmed. With hubs all across the country, including Alaska, the Gulf Coast, and the North East, Sea to Table has access to some of the freshest in-season seafood around.
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The recent funding will be used to help the company expand its sustainable food sourcing program and build on its existing distribution centers.
One of the biggest hurdles–and expenses–that any food delivery service faces is the cost of shipping. After all, the last thing the company or consumer would want is to come home to a box full of spoiled food. In June 2015, the company opted for a jute-based material to package and transport its perishable product. The plant-based and recyclable fiber reduces the company’s carbon emissions footprint. Best of all, customers can reuse the material for a variety of projects, including their gardens.
According to the company, Plated has increased its revenue by 400 percent between 2014 and 2015 alone. Part of the secret ingredient to this success may have something to do with the brand’s decision to expand its menu to include items outside of lunch and dinner, like dessert.
Notwithstanding Plated’s success, competition among food delivery services remains fierce. Direct competitor Blue Apron recently scored $135 million in Series D funding at a valuation of roughly $2 billion and on July 15, 2015, Blue Apron launched a mobile app that allows members to modify their menu selections and delivery specifications. The app also links to social media, offering users a chance to show off their culinary accomplishments. For Blue Apron clients looking to increase the knife skills, the app features video cooking lessons geared toward the menu items that they offer. Plated also has an app, that offers some of the same features.
Formation 8 targets companies that provide industry-wide transformations. “In a wave of creative destruction, we believe emerging platforms will replace the decades old technology infrastructure behind many industries,” reads the company’s website. Some of its current portfolio holdings include companies involved in food and agriculture. Bolt Threads, for example, uses naturally-occurring proteins to develop fibers and fabrics with both practical and revolutionary uses.
Providing venture capital to a wide variety of startups for almost a decade, Greycroft is actively investing through its Greycroft II fund, a $175 million venture capital fund, and Greycroft Growth, a $200 million growth-stage fund. Portfolio members experience hands-on assistance from partners, who have no minimum ownership percentage requirements. The company has invested in many social media apps and popular consumer good distributors, like BaubleBar. Greycroft has also made recent exits in two high-circulation digital media outlets: The Huffington Post and Elite Daily.
The recent funding brings Plated’s total raise history to $56.4 million over five rounds.