A London-based healthy meal delivery service, for consumers at work or at home, has raised £1 million ($1.6 million) in seed capital from a group of U.K. and Dutch investors.
With a mission to provide customers with freshly cooked meals using ingredients sourced from local producers, Pronto is a rarity in the U.K. compared to a more bustling healthy food e-commerce sector in the U.S. And there is potential for the service to expand to Amsterdam at some stage, according to James Roy Poulter, chief executive at Pronto.
“We have a huge opportunity under our noses in London and we can grow very fast here,” Poulter told AgFunderNews.
Playfair Capital, a London-headquartered VC firms that invests in “entrepreneurs building technology that generates a quantum leap in the way people live, work, and play for the better”, led the round after Poulter spent a period of time working out of the firm’s co-working space in London, Warner Yard.
Other investors in the round included Ballpark Ventures, a small, boutique, early stage tech fund, the £85 million government-backed London Co-Investment Fund, Dutch tech entrepreneur Patrick de Laive and Seedcamp, an acceleration fund.
“We are lucky to have some key players here in Europe,” said Poulter acknowledging that the U.K. and European venture industries are still much smaller than that in the U.S.. “There is a lot of capital here, but it’s much more risk averse. There is much less pre-product stuff done here.”
The food e-commerce sector is also much more developed in the U.S. with a range of options from meal kits to cooked meals to grocery delivery raising over $550 million during the first half of the year, according to AgFunder’s mid-year data report. In the cooked meal delivery segment, organic workday lunch delivery service Green Plate announced a $150,000 seed round today, following the $17 million Series A of Zesty, a similar office-focused model, last month.
Pronto launched in 2014 and started serving customers in London at the end of the year when Poulter himself was doing some of the cooking and made over 300 deliveries. The business now has over 1,000 customers with a large number of repeat customers that are ordering more than five times a month, according to Poulter.
“We are still at a small scale that we’ve been at since February, and that’s because we’ve been supply constrained and so unable to expand,” he said. The business has now moved into new premises — “proper production kitchens”, in Poulter’s words — and has hired a new chef who worked at Bombay Bicycle Club and cooked first and business class meals for Etihad Airways and British Airways.
The proceeds of the seed round will be used to hire more personnel and start a marketing push for the first time.
Commenting on the stalled expansion of other food e-commerce startups such as Good Eggs, which recently had to close operations in cities outside of San Francisco, Poulter is aware of the need to scale carefully.
“We have to make sure we’ve proven out our new sites in London before going elsewhere,” he said. “We are going to put one foot in front of the other. We know the supply side can handle much greater volumes than we are currently doing and we have talent on operations side with experience of much greater volumes.”
The company’s drivers are also of top importance as Poulter sees them as playing a key role in customer services for the business, so any expansion will require careful recruitment too, he added.
Having said this, Poulter is very ambitious for the next stage of Pronto’s development and is likely to return to the market during the first quarter of next year with a Series A when he hopes to tap some U.S. investors. Watch out Palo Alto!
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