Home Chef raises $40 million, its biggest funding round yet
September 30, 2016 11:43 AM
Online meal delivery service Home Chef has closed a $40 million funding round that it will use to expand.
This latest round is led by private equity firm L Catterton and brings the total raised by the three-year-old company to $52 million across six funding rounds.
Home Chef chief revenue officer Richard DeNardis says the money will go toward adding staff and other initiatives. “We plan to use proceeds from this round to continue growing our customer base, team and operational infrastructure,” he says. “As more customers become aware of the benefits that meal-kit services provide, we will continue to grow by offering a broad range of familiar choices and a simple, intuitive cooking experience.”
DeNardis declined to provide revenue projections for 2016.
Here’s how Home Chef works—Shoppers sign up using their email address and zip code and fill out a meal preference questionnaire, specifying which types of food they prefer to eat, which ingredients they prefer to avoid, dietary preferences, and how many people they’re cooking for among other questions. Home Chef offers free delivery and charges shoppers $9.95 per serving for up to six servings.
“We are experiencing tremendous growth and this round of investment will enable us to achieve our growth goals," said Home Chef CEO and founder Pat Vihtelic.
Home Chef, No. 813 in the Internet Retailer 2016 Second 500 Guide, launched in September 2013. Its 2015 online sales totaled $10.4 million, up from $400,000 in 2014, its first full year in business. The company, with more than 600 employees, says it delivered more than a million meals last year. Home Chef ships to all states in the continental United States (some states are not fully covered) and says it expanded delivery this year to cover 90% of the U.S.
Home Chef is the latest in a string of food-focused online retailers to raise major funds this week. Earlier this week, Fresh Direct LLC, No. 73 in the Internet Retailer 2016 Top 500 Guide, announced it had raised $189 million in private equity funding.
Internet Retailer’s first-ever 2016 Online Food Report documents how the online sale of food is suddenly a booming market and puts to rest the notion that food retailing is the exclusive province of stores. The 25-page research report, “Online Food Shopping Goes Mainstream,” identifies the major players driving this sea change in food retailing, estimates the future growth of the online food retailing and more. For more information about the report, visit this page.