Tovala, a smart oven and meal delivery startup based in Chicago, announced today they have raised a $30 million series C funding round led by consumer-tech VC Left Lane Capital.
The funding round follows a $20 million series B Tovala raised last June.
So why did the company raise another huge round six months after the last one? The biggest reason, according to Tovala CEO David Rabie, was the company’s continued growth.
“The business has grown 10X over the past 18 months,” Rabie told me via Zoom this week. “A big chunk of that came pre-COVID, a big chunk came post COVID. COVID accelerated some things, but the business was already on pace to grow quickly.”
According to Rabie, the fit with Left Land Capital was another reason. Tovala felt their new lead investor, which focuses on consumer-focused Internet companies (some of the firm’s previous investments include Freshly, Farmer’s Dog and DeliveryHero), had the right expertise to help them scale.
“They have more depth of expertise in the consumer subscription space than almost anyone we’ve talked to, especially especially direct to consumer,” Rabie said. “They were really interested. At some point we were going to go raise another round, and we had gotten to know them pretty well over the course of last year, and felt like it was a great fit.”
So what is Tovala going do with its new growth capital? According to Rabie, the company plans to continue to invest in the product, by which he means everything on both the food and technology side.
“All of it, from you know the app to the packaging to the oven to the food within our walls, those are all products, and each of them are kind of an important part of the customer journey. And you know what we’ve built we think is really good, but we think it can get a lot better.”
A big chunk of the new investment will go to a new food production and packaging facility to serve the western half of the US. Currently Tovala services the entire US out of two facilities in Illinois, and so they plan to lease a new space and build out a new production, packaging and delivery facility “west of the Rockies” to serve the west and parts of the south.
What the funding won’t necessarily be used for is building a new oven, in part because the current model is working pretty well for them.
“We’re still in the exploratory phase where we’re really trying to figure out if we are going to go pursue a gen three,” said Rabie. ” What does it need to do, because the gen two works quite well. Reviews are really strong customers love it. There are not people banging on our door saying ‘if only the gen two did x, we would buy more of them current price.'”
Regardless of how it plans to spend its new cash infusion, that there is strong investor interest sets the company apart from some of its peers in the consumer hardware space. While others like Zimmplistic and Chefsteps failed to find additional financing, investors have continued to knock on Tovala’s door.
I asked Rabie why they’ve succeeded where others have struggled.
“I think it’s a complex answer,” said Rabie. “Part of it was the problem we went about solving is kind of different from all the other players. For this to work, you have to be good at building physical product, you have to be good at managing food and a food supply chain, you have to be good at marketing, you have to be good at customer service. A lot of things have to go right for it to work.”
The only other countertop smart cooking appliance seeing similar traction is Anova, which continues to sell out of their new precision steam oven. I asked Rabie if this is a sign that steam ovens might be the next breakout category.
“To be totally frank, Anova will have more to do with that than us, because we have different customers,” said Rabie. “My guess is the customer that’s buying the Anova oven is interested in cooking hacks and cooking gadgets. Our customer is like, ‘I’m really busy. I want a high quality meal on a Tuesday night, and I don’t want to keep spending $60 on Doordash.'”
I’ll be interviewing David Rabie about their latest funding round on Clubhouse today at 10 AM PT. Join us to listen and ask questions.
Leave a Reply