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Daily news and analysis about the food tech revolution

Funding

Imperfect Foods Raises a $95M Series D Round

Imperfect Foods, a national online grocer that specializes in selling surplus and cosmetically “imperfect” foods, announced today that it has raised a $95 million Series D round of funding. The round was led by Insight Partners and brings Imperfect’s total amount of funding to $214.1 million.

Imperfect Foods (formerly Imperfect Produce) aims to reduce waste in our current food system by “rescuing” so-called ugly foods — think misshapen carrots or potatoes — and selling them directly to consumers at a discounted prices. Without these rescues, such food would go straight to the landfill, further contributing to the world’s multibillion food waste problem.

In 2020, Imperfect transitioned from a regional produce delivery service into a national full-service grocer, expanding its catalog to include pantry items, meat, seafood, dairy and other products. Items sold are surplus, cosmetically imperfect, or sourced from sustainable partners. Some examples from last year include buying up allotments of cheese plates going unused by airlines and popcorn kernels from empty movie theaters. Imperfect also released a holiday snack box at the end of 2020 that featured cosmetically imperfect but otherwise perfectly edible snack items.

Imperfect said in today’s press announcement that it has a growing customers subscriber base of more than 350,000 customers. But it’s not alone in the “ugly” food space. Misfits Market, which does much the same thing, has raised more than $100 million in funding.

That money is flowing into Imperfect and Misfits is not too much of a surprise. The global pandemic pushed record numbers of people into online shopping. Even though vaccines are now out, and we may be seeing the pandemic recede, grocery e-commerce is projected to remain sticky with consumers and grow to gobble up 21.5 percent of overall grocery spending by 2025. So having an established grocery delivery infrastructure right now is far from an imperfect business idea.

Deliveroo Raises $180M, Nabs $7B Valuation

Deliveroo announced this week it has raised over $180 million in Series H funding from existing investors. The round was led by Durable Capital Partners LP and Fidelity Management and Research Company LLC. With it, Deliveroo is now valued at over $7 billion, according to an official company statement. 

The new funds come ahead of Deliveroo’s initial public offering, which is expected to happen in the next few months.

The London, U.K.-based company said it would use the new funds to “further drive growth and enhancements to its services for restaurants, riders and consumers.” Examples of those areas include expanding Editions, Deliveroo’s delivery-only kitchen sites, expanding its grocery delivery service, and expanding its Plus subscription service. The company also said it would offer more restaurants its Signature service, which lets customers order via a restaurant’s own website.

It’s a shift from several months ago, when Deliveroo had to cut 15 percent of its staff in response to the pandemic. Also around that time, U.K. regulatory watchdog the Competition and Markets Authority approved Amazon’s highly scrutinized investment into Deliveroo, saying the delivery business could collapse without the funds. 

But, like other third-party delivery services around the world, Deliveroo has wound up faring very well so far throughout the pandemic. Will Shu, Deliveroo’s founder, told The Guardian in December that COVID-19 had “accelerated consumer adoption of food delivery services by about two or three years,” and that order volumes for the service in the U.K. and Ireland were double those of 2019. In the same interview, Shu also said his company had been profitable “at the operating level” for about six months.  

Currently, Deliveroo operates in 12 countries, including a number of Western European nations as well as Singapore, Australia, and the United Arab Emirates. Its main competitor, Just Eat Takeaway.com, operates in many of the same markets.

Weezy Raises $20M Series A for Fast Grocery Delivery

UK-based speedy grocery delivery service Weezy has raised a $20 million Series A round of funding. TechCrunch was first to report the news, writing that the round was led by New York-based Left Lane Capital, with participation from DN Capital, existing investors Heartcore Capital and angel investors. Today’s funding announcement follows a $1 million pre-Seed round raised by Weezy in August of last year.

Weezy promises grocery delivery in as little as 15 minutes, thanks to its network of smaller fulfillment centers that are nestled within neighborhoods, closer to shoppers. Orders are then delivered via a network of its delivery people riding electric scooters or bicycles.

Weezy operates in London and will use the cash to expand to more neighborhoods in that city and across the U.K. As TechCrunch notes, the presence of a U.S.-based lead investor could indicate that a hop across the pond to the states could be in the offing.

Speedy European grocery delivery appears to be a sector that’s heating up for venture capital. Last month, Germany-based Gorillas raised $44 million for its similar, smaller fulfillment center approach to grocery delivery.

Here in the U.S. we see companies such as Fabric building out small automated grocery fulfillment centers and DoorDash building out a network of dark convenience stores that are delivery only.

It’s no wonder that money is flowing into online grocery services. The pandemic pushed record amounts of people into e-grocery shopping last year. With the virus still raging across the globe and subsequent lockdowns, online grocery shopping remains sticky with consumers, who are now habituated to new purchasing behaviors.

CookUnity Raises $15.5M to Expand ‘Chef-to-Consumer’ Meal Service

Meal subscription service CookUnity announced today it has raised $15.5 million in Series A funding. The round was led by Fuel Venture Capital with participation from new and existing investors, including IDC Ventures, which led CookUnity’s seed round of funding. The Series A round brings CookUnity’s total funding to date to $23 million. 

The Brooklyn, NY-based company said it plans to use the new funds to expand its service across North America, grow its marketing efforts, and open two new kitchens, in California and Texas, to support the expansion.

CookUnity bills itself as a “chef-to-consumer platform.” Its subscription service, which currently serves New York City, offers users weekly choices of meals made by a wide range of local chefs, from those with Michelin stars to up-and-coming ones. Pricing starts at $10.49 per meal, with food options serving a fairly wide range of dietary needs and preferences. Meals arrive fully prepared, with instructions for heating and plating. 

For chefs, both established and up and coming, CookUnity’s platform provides another way to reach potential customers. This is especially important at a time when most restaurants are still operating under capacity restrictions. Consumers over the last several months have turned to other means of getting dinner on the table. One of those ways has been meal kits and subscription services, a sector that’s seen something of a resurgence in recent months. Bringing chefs, many of which have been out of work because of the pandemic, to the meal kit sector seems an obvious way to create new food options for consumers and opportunities for those making the food.

To that end, CookUnity says it plans to expand its roster of chefs in the coming months. The company currently has 32 chefs participating and says it will aggressively expand that number to around 150 by mid-2022. The new kitchen locations opening in Los Angeles and Texas will also expand CookUnity’s chef roster beyond local NYC chefs. 

Delivery Hero Launches its Own VC Fund, DX Ventures, to Invest Across Food Tech

Global food delivery service Delivery Hero announced today the official launch of its own venture capital fund that will invest in food, delivery, and other areas of the food industry. Called DX Ventures, the fund has a dedicated pool of long-term capital to devote to companies working in on-demand services, food tech, fintech, artificial intelligence, and logistics, according to a press release sent to The Spoon.

Duncan McIntyre, Managing Director of DX Ventures, said the fund was something Delivery Hero has been thinking about for a number of years, and that investments into other companies is a strong part of how the service has been built over the years. “We’ve made about $500 million [in] minority investments over the last couple years,” he told me over the phone recently. Out of the success of those investments came the next obvious step: formalizing the concept of Delivery Hero as an investor. Hence, DX Ventures.

The fund will start off with a focus on early-stage companies, such as those at Series A level. “The aim of the fund is to look at industries and areas that are going to be disruptive over the next 10 years,” McIntyre said. That could include food delivery, but it might also include adjacent areas, such as alternative proteins, packaging alternatives, or supply chain features.

He added that DX Ventures will also look for companies that compliment the core Delivery Hero platform. Delivery Hero, for example, has added grocery delivery to its list of services (see the company’s $360 million acquisition of InstaShop last year). McIntyre suggested that companies contributing to the grocery delivery sector might be appropriate candidates to receive investment from DX Ventures. Other examples might include companies that can improve the restaurant delivery experience by providing better tracking, shorter delivery windows, lower price points, or healthier food options. “There’s a lot of efficiency to be gained in the food system,” said McIntyre.

All of the above examples are hypothetical at this point, as DX Ventures has yet to announce any companies it is investing in. At the moment, the fund is actively looking for companies in which to invest over the long term.

Potential companies can be located anywhere geographically speaking, though the fund will also focus on markets where Delivery Hero already has a presence. At the moment, that includes no less than 50 countries across Asia, Europe, Latin America, the Middle East, and North Africa. 

DX Ventures will be independently managed from Delivery Hero.

Outstanding Foods Raises $10M Series A for its Plant-Based Pork Rinds and Puffs

Outstanding Foods, the company behind PigOut Pigless Pork Rinds, announced today that it has raised a $10 million Series A round of funding. The round was led by SternAegis Ventures, which previously led Outstanding Foods’ $5 million round of financing last July.

In addition to PigOut, Outstanding Foods recently launched the plant-based TakeOut Meal-In-A-Bag Puffs snacks. Coming in varieties such as “Pizza Partay” and “Hella Hot,” these puffs are non-GMO, gluten free, certified plant-based, soy-free and contain 21 grams of protein per bag. On its website, Outstanding Foods claims you can eat a bag as a meal. And while I do like their PigOut snacks, I’m not sure I’d serve myself a bag of “Chill Ranch” puffs for dinner anytime soon.

In today’s press announcement, Outstanding Foods said it will use the new funding to expand its retail footprint and its direct-to-consumer (D2C) marketing efforts. Outstanding was part of the CPG D2C boom we saw last year, in which PepsiCo, Impossible Foods, Beyond Meat and a host of smaller snack brands all made their products available for direct sale to consumers.

Launching D2C sales channels made a lot of sense in 2020 as the pandemic spurred on both initial panic buying (causing empty shelves at local stores) and had people minimizing any trips outside their homes. The pandemic also had us craving snack foods, so the ability to get them delivered to our door was a smart play that not only generated revenue for brands, but also allowed brands to fully own the customer relationship and data.

But Outstanding isn’t putting all its pigless pork rinds in one online basket, the company’s snacks are currently available in real world stores such as Walmart, Kroger, Whole Foods and southwest 7-11 locations.

Surplus Food Marketplace Too Good to Go Raises $31M to Expand in the U.S.

Copenhagen, Denmark-based Too Good to Go announced today it has raised €25.7 million (~$31 million) to expand its surplus food marketplace that fights food waste. The investment was led by /blisce, with participation from existing investors and employees. 

Too Good to Go’s main mission is fighting food waste. The company partners with hotels, restaurants, supermarkets, and other businesses that have surplus food items at the end of each day. Those businesses can list food on Too Good to Go’s B2C marketplace at discounted prices. Consumers then simply browse the marketplace via the Too Good to Go app or website, place an order, and retrieve their food from the merchant at a designated time.

Too Good to Go already operates in 15 countries around the world, including several in Europe, including the U.K., Spain, and Italy. The expansion enabled by this new funding will focus mainly on the U.S., where the company has a smaller presence. It launched in New York City and Boston in September 2020, and has since also moved into parts of New Jersey. Specific cities and locations for this latest expansion were not named, though Too Good to Go’s roster of partners includes everyone from local grocers to massive chains like Hilton, Coop, Le Pain Quotidien, Yo! Sushi, and many others.

Surplus food marketplaces are not as prevalent in the U.S. as they are in other countries, despite the fact that the majority of food waste in this country happens at consumer-facing levels. Flashfood, a Canada-based company that offers a similar surplus food business, operates in some parts of the U.S. Karma is another Scandinavia-based surplus food app, but as yet it does not have a presence in the U.S.

All of which is to say, the opportunity is still wide open for Too Good to Go and other companies bringing the surplus food concept Stateside. 

Thistle Raises $10.3M to Expand Its Plant-Forward Meal Delivery Service

San Francisco-based prepared meal service Thistle announced this week it has raised a $10.3 million Series B round to expand its plant-based meal delivery operation. The round was led by PowerPlant Ventures, with participation from Siddhi Capital, Alumni Ventures Group, and the venture arm of Rich Products Corporation. The new financing brings Thistle’s total funding to date to $17 million. 

The company will use the new funds to widen its geographical reach. Currently, Thistle’s service is available in many parts of California, including the San Francisco Bay Area, the North Bay, Sacramento, Davis County, Orange County, and Los Angeles. It also recently added Las Vegas, Nevada to its roster, and also ships to other parts of Arizona, Idaho, Oregon, Utah, and Washington.

According to today’s press release, the new expansion will push the company towards having “a bi-coastal footprint” at some point in 2021 as well as a new production facility most likely to be located on the East Coast. 

Thistle’s service itself offers ready-made plant-based meals delivered to customers doorsteps via a weekly subscription that can be customized based on the number of days a user needs the food. Meals include breakfast, lunch, and dinner items as well as snacks and juices.

The company said in today’s press release that part of the new Series B funding will go towards launching new features for customers, including a complimentary virtual consultation with an in-house dietician.

Meal delivery, whether ready-made meals a la Thistle or more traditional kits from the likes of Blue Apron, have enjoyed an uptick in demand because of the COVID-19 pandemic, which has limited options for consumers in terms of eating out or finding prepared foods. As it expands, Thistle’s chief competition will be other companies that delivery ready-made healthy meals. That includes Factor75, which was recently acquired by HelloFresh, and FreshlyFit, the healthy meal line by Nestlé-owned Freshly.  

 

Air Protein Raises $32M to Make Meat From Air

Air Protein, a company using technology to make meat from elements in the air, announced today it has completed a $32 million Series A round of fundraising. The round was led by ADM Ventures, Barclays, and GV (formerly Google Ventures), according to a press announcement sent to The Spoon.

Air Protein’s approach to alternative meat is fairly unique at this point in the evolution of alt-protein. The company feeds elements found in the air, such as carbon dioxide, to microbes in a fermentation tank. The microbes ingest the air elements and output a healthy protein that then gets texturized and turned into various alt meat products. Though the company has not yet named specific types of meat it is developing, it does plan to create products it will sell directly to consumers (as opposed to selling to other food producers). 

Speaking on the phone this week, Air Protein’s CEO and cofounder Dr. Lisa Dyson told me the company’s technology is “very flexible” in terms of the types of meat it can produce. And since air protein, the concept, requires very few resources (e.g., land, water) to produce, it can be produced virtually anywhere in the world.  

To that end, San Francisco Bay Area-based Air Protein plans to use its new funds in part to launch an R&D lab that will help develop different types of alt-meats as well as scale production. On the phone, Dr. Dyson said the lab will allow her company to “produce and expand” its product line, and that the forthcoming R&D innovation lab will be key to that process. 

Air Protein will also use the new funds to recruit and build up its team of employees.

For now, at least, the company is focused on producing only meat alternatives. As Dr. Dyson explained, the traditional meat industry is one of the largest greenhouse gas emitters on the planet, as well as an industry that uses unsustainable amounts of resources like land and water. But demand for meat continues to rise, and with a global population moving steadily towards 10 billion people by 2050, the need for alternatives gets more urgent each year. “We need solutions and Air Protein is excited to be one of those solutions,” Dr. Dyson said. 

She was quick to applaud the efforts of other types of alternative meat production, including plant-based meat, and suggested that due to the sheer amount of demand globally for meat, opportunity exists now and will continue to for many different methods and companies. Air Protein’s high-tech, resource-light method for meat is one way to satiate the planet’s appetite for meat without incurring so heavy an environmental burden. 

New Wave Foods Raises $18M for Plant-Based Seafood

New Wave Foods announced today it has closed an $18 million Series A round for its plant-based seafood alternatives. The round was led by New Enterprise Associates and Evolution VC Partners with participation from “other new and existing investors,” according to a press release sent to The Spoon.

The new round will enable New Wave Foods to scale up production and expand sales and marketing, as well as build out its team and plan for future products. Initially, the company will sell its products directly to restaurants and foodservice businesses, where it says roughly 80 percent of all shrimp in the U.S. is consumed.

Currently, New Wave Foods makes a shrimp alternative from seaweed and plant proteins, the idea being to provide a more planet-friendly version of the U.S.’s most popular seafood item. Deforestation and the permanent destruction of mangroves, increased greenhouse gases, and human rights abuses are just a few of the unsavory byproducts of traditional shrimp production. With its shrimp alternative, New Wave Foods wants to provide product that is “virtually indistinguishable from ocean shrimp in terms of taste and texture” but doesn’t come with the environmental and human consequences tied to parts of the traditional fishing industry.

Tyson Foods made an undisclosed investment in New Wave Foods in 2019, taking a minority stake of less than 20 percent.

Speaking in today’s press release, New Wave said that its shrimp product will be versatile enough to fit in a range of different dishes, though the company hasn’t yet publicly named any official restaurant or foodservice partners.  

Following the launch of its shrimp product, New Wave Foods plans to develop plant-based lobster, scallops, and crab. 

GenoPalate Raises $4 Million Series A for its Personalized Nutrition Platform

Personalized nutrition company, GenoPalate, announced yesterday that it completed a $4 million Series A round of funding. In the press announcement, the Milwaukee-based company said the new financing came from local investors. This brings the total amount raised by the company to $5.7 million.

GenoPalate was founded in 2016 by Yi Sherry Zhang, Ph.D, who described the what the company does for The Spoon last year, saying:

Through a simple swab test, GenoPalate’s nutrigenetic home test analyzes 100+ genetic markers that determine a person’s specific needs for 24 vital nutrients such as carbohydrates, vitamin D, and sodium, and sensitivities to lactose, gluten, caffeine and alcohol. The company combines genetic results with millions of nutritional variables to recommend the foods a person should eat more of. Then each client receives a report that includes their genetic results, what they mean, and a personalized list of the 80+ foods that benefit that specific client the most. Using its genetics-based personalized nutrition technology, GenoPalate is changing how people choose, shop for and eat food for better health.

Former Spoon writer, Catherine Lamb tried GenoPalate for herself earlier this year, and wrote about the experience, saying:

What I found was surprisingly . . . unsurprising. I was told I should eat a diet that’s moderately high in carbohydrates, high in fiber, and has low levels of sugar and saturated fat (but is high in “healthy” fats). I’m likely lactose intolerant (can confirm: yep) and likely not sensitive to gluten. I’m a fast caffeine metabolizer and a normal alcohol metabolizer. I have gene variants that indicate I might need to consume higher levels of Vitamin A, E, and D, among others.

Personalized nutrition is certainly a trend we’re following at The Spoon, covering other players in the space such as Viome, Sun Genomics, Genopalate, DNANudge, DayTwo and Nylos. You can check out our market report How Microbiome and DNA-based Personalized Nutrition Will Change the Way We Eat on our Spoon Plus membership service for a deep dive on the personalized nutrition market.

Goodfish Raises $4M for Upcycled Salmon Snacks

Goodfish, a company that upcycles salmon skin by turning it into snack foods, announced today it has closed a $4 million Series A investment round. The round was led by AF Ventures and Siddhi Capital. In a press release sent to The Spoon, the company said it will use the new funds to “support the surging demand for its products, deepen R&D capability and accelerate product innovation.”

Goodfish was started by the founders of beverage company Harmless Harvest, and products became available for online purchase this year. The snacks resemble crunchy chips in texture and are made from the reclaimed skins of Wild Alaskan Sockeye that would normally go to waste. The idea is to create a chip-like snack with far more health benefits (clean protein and marine collagen among them) and far fewer calories. The skins are sourced from well-regulated fisheries in Bristol Bay, Alaska.

Cofounder Justin Guilbert, said in today’s press release that Goodfish’s online-only distribution strategy “paid off well above expectations” and led to an earlier fundraised than expected. Hence the close of the Series A round today. 

Given that folks have been snacking their way through this pandemic, it’s no surprise companies offering healthier alternatives are getting noticed (and receiving funding). Others include Renewal Mill, which uses upcycled okara flour to make cookies, plant-based pork rind-maker Pig Out, and jerky made from jackfruit by a company called Jack and Tom.

Goodfish did not say whether it plans to eventually expand to brick-and-mortar stores for distribution. For now, products are available via the company’s own direct-to-consumer website.