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The Spoon

Daily news and analysis about the food tech revolution

home cooks

WoodSpoon Raises $14M to Expand its Home Chef Marketplace

WoodSpoon, the New York City-based online marketplace where home chefs can make their food available for ordering and on-demand delivery, announced today that it has raised a $14 million Series A round of funding. Restaurant Brands International (RBI) led the round with participation from World Trade Ventures, Victor Lazarte and other individual investors. This brings the total amount of funding raised by WoodSpoon to $16 million.

WoodSpoon is part of a slowly but steadily rising movement of startups such as DishDivvy and Shef that enable home cooks to sell their wares online. WoodSpoon vets potential home cooks for safety, sanitation and food quality before admitting them on to the platform. Once a chef is onboarded, WoodSpoon takes care of the logistics like insurance and delivery, and even helps with things like food photos and videos to better tell chefs’ stories. WoodSpoon currently operates in Manhattan, Brooklyn and Queens in New York City, where users download the WoodSpoon app or visit the website, order a meal and have it delivered in 30 to 40 minutes.

Oren Saar, Co-Founder and CEO of WoodSpoon told me during a video chat last week that the company currently has 150 active home chefs on its platform (“active” means they’ve cooked meals for sale two times in the past month). Saar also said that 35 percent of customers who buy their first meal on WoodSpoon buy an additional three meals on the service within 17 days.

Selling home-cooked meals is still very much a new idea, and regulations are still being worked out on a state-by-state basis. Because of this, Saar said that WoodSpoon puts a lot of effort into educating potential customers about the idea of buying your neighbor’s home cooked meals. Part of that process, Saar said, was putting the chefs front and center, highlighting the home cooks themselves and the kitchens where meals are made. “You can read everything about the chef making your food,” Saar said, “That should reduce the automatic bias.”

WoodSpoon’s funding is the second big raise we’ve seen from a home cook marketplace this summer, as Shef raised $20 million in June. Shef is a little different from WoodSpoon however, as Shef isn’t on-demand. It delivers prepared meals cold that are then heated up by the customer.

With its new capital, Saar said that WoodSpoon will expand to cover all of New York City before moving on to be in up to 15 different markets across the U.S. Worth noting about this funding round is that it’s led by RBI, which owns the famous QSR brands Burger King, Popeye’s and Tim Horton’s. RBI’s involvement could possibly help accelerate regulatory clarity and acceptance of legalized home cooking across the country, and perhaps it could even help create mini home cook moguls go from neighborhood business to national brand.

Shef Raises $20M for Home Cooked Meal Delivery

Shef, a startup that enables home cooks to sell their food for delivery, announced today that it has raised a $20 million Series A round of funding. The round was led by Andreessen Horowitz with participation from Craft Ventures, Y Combinator, Pioneer Fund, M13 and a bunch of celebrities including Padma Lakshmi, Tiffany Haddish, Katy Perry, Orlando Bloom, chef Aarón Sánchez and NBA player Andre Iguodala. This brings the total amount raised by Shef to $28.8 million.

Currently available in seven markets, including the San Francisco Bay Area, New York, Seattle, Chicago, Houston, and Austin, Shef’s online platform is a marketplace of independent cooks and chefs who either make meals out of their home or in a commercial kitchen. Shef has a rigorous application process that includes a food safety exam, food quality assessment, as well as standard sanitation practices such as hairnets and gloves.

Customers plug in their zip code on Shef’s website to peruse cuisine and cook options available in their area. Shef, however, doesn’t facilitate on-demand, hot food delivery. Meals must be ordered two days in advance and arrive cold for people to re-heat at home, so the service is more akin to a meal planning-type service. Since the cooks on Shef’s platform aren’t professional restauranteurs, this type of advanced ordering system allows them to better prepare inventories and schedules, rather than trying to anticipate demand on any given night. The advanced ordering also makes it easier for Shef to facilitate deliveries.

The legality of selling home cooked meals is still a bit of a grey area from state to state. In 2018, California signed AB-626 into law, making it legal to start a home-based food business in the state. Alvin Salehi, co-founder and co-CEO at Shef told me by video chat last week that there were 44 home cooking bills introduced during the last legistlative session across 29 different states. As part of today’s news, Shef also announced that it has hired Danielle Merida as its general counsel to collaborate with policy makers and advocate for the expansion of home cooking laws across the US.

The home cooking space has been relatively quiet since DishDivvy launched its service in California in 2018, but perhaps the pandemic will shift activity in the sector. The allure of the side hustle plus a reluctance to go back to an office could spur a wave of would-be cooking entrepreneurs to make meals out of their kitchen. Salehi said that the waitlist to be a cook on Shef swelled to more than 12,000 people.

Shef says that more than 85 percent of the cooks on its platform identify as a person of color. With its new funding, Shef will expand both the number of cooks on its platform, as well as the number of cities it serves.

Smart! FoodCloud Kitchen Cam Provides Video of Your Home Cooked Meal Being Prepared

The one thing that keeps me from getting too excited about the legalization of home cooks selling their meals is sanitation. How clean is that home kitchen and how many kids’ grubby hands are grabbing things in there? As you can imagine, the COVID-19 pandemic has only intensified those feelings, as I want to know as much as I can about my food and who has touched it.

So I was intrigued/happy to see that Indian home cook startup FoodCloud launched a new Kitchen Cam feature. The company’s Co-Founder and COO, Sanjhi Rajgarhia posted a video to Linkedin, writing, “When you place an order, foodcloud.in will send you a video of your order being prepared. Our home chefs are making food with love, just like it is at home.”

To its credit, FoodCloud already had a pretty rigorous on-boarding process in order for home cooks to get on its platform. As we wrote a year ago:

First, each home chef must be registered with the Food Safety and Standards Authority of India (FSSAI), which is the country’s equivalent of the USDA, for kitchen inspection and hygiene regulation. After that, a home cook’s food is taste-tested by not just FoodCloud employees, but also local food bloggers and critics.

Adding a video check-in like the Kitchen Cam is a smart addition to those requirements. It’s awesome to be able to see the kitchen where the food is being prepped as well as precautions the cooks themselves are taking (hairnets and gloves!).

However, it’s hard to tell exactly how strict the Kitchen Cam will be. The video embedded is obviously edited and doesn’t seem like it was livestreamed, so there are gaps in there when who knows what could happen. The crew in the video seems pretty professional with nice equipment and embroidered shirts and also evidently have an extra pair of hands to video what’s going on. What do smaller home cook operations need to provide for Kitchen Cam? Also when is the video made available to the customer? Is there a livestream option? We reached out to FoodCloud to find out more. UPDATE: FoodCloud sent us the following via email: “Currently, [Kitchen Cam] is not mandatory but a feature that the home chef opts for. It is not livestreamed however, the customer can see the dishes that they’ve ordered being prepared. The videos are sent to them privately.”

Personally, I would love to see something like this from home cooking marketplaces here in the US. It’s still a nascent industry, so if we can make it a standard practice now, it could go a long way towards more people buying meals from home cooks.

Appetivo and the Coming Wave of Home Cooked Meal Marketplaces

California’s AB 626 hasn’t even been a law for a full week and already we’re seeing startups step up to be the among the first to monetize the potential home cook economy. Case in point: Appetivo today announced the launch of its online platform for home based cooking businesses (and it’s the second one in a week).

Los Angeles-based Appetivo is an online marketplace that allows home cooks to sell their food to anyone. The app uses geolocation so someone looking for Italian food could see which home cooks are nearby offering that type of cuisine. At least initially, food will only be available for pick up, not delivery.

Appetivo will have a vetting process that involves site inspection and services to help home cooks get the proper permitting they’ll need to comply with AB 626 requirements. I say “will” because Appetivo hasn’t started onboarding people in the U.S. yet. As the law rolls out across the state, Appetivo will work with various municipalities to provide kitchens with an onboarding framework. Home chefs interested can learn more about timing and the process at Appetivo’s site.

The company has been operating in Mexico City for the past six months, where a less regulation-heavy environment has helped them build out and test their platform with a dozen kitchens. “What we’ve learned in Mexico, is that it’s one thing to build a platform. It’s a whole other thing to drive the business,” said Steve Voci, Chief Business Officer of Appetivo. “Anyone can build an elegant app, but how do you get kitchens to sign up? How do you get people to get permitted?”

So far, Appetivo is self and angel funded. In the U.S., it will first roll out in LA and other parts of Southern California. The company will make money by charging a 10 to 15 percent commission on orders to the consumer, so the home cook won’t have to pay.

Appetivo will be facing competition from DishDivvy, which launched last week in LA, and was actively involved in lobbying for the bill’s passage into law. In speaking with both companies, it seems like DishDivvy has a more rigorous on-boarding process for its home cooks, and has already started delivery discussions with DoorDash.

Rest assured that there will be many more startups like Appetivo and DishDivvy to follow. Home based cooking is an entirely new market and companies will be vying to become the “Uber for home cooks.” If other states adopt similar measures, these California-based companies will have more experience and an edge to scale out nationally.

Yes, The Cottage Food Market Might Be Uberized, But That’s Not A Bad Thing

Most fresh food made at home (outside of canned and baked goods) is illegal to sell commercially in many states, including California.  Because of this, some in California have been working on creating momentum for a bill called the 2018 Homemade Food Operations Act (AB 626) in hopes that it will pass through the California legislature this year and become law.

The reason this is interesting to me is a) California often leads the country when it comes to forward-leaning legislation and if AB 626 passes it could open the door for nationwide legalization and give a framework for home food entrepreneurs (also known as the ‘cottage food’ industry), and b) I think home cooking is the next big micro-entrepreneur space to open up, much like home sharing and ride sharing did over the past decade.

While you’d think most would be on board, not everyone is. As can be seen from this excerpt from a guest column in the LA Times by Christina Oatfield, policy director of the Sustainable Economies Law Center in Oakland, some see a darker side to AB 626:

If AB 626 becomes law, the homemade food market would likely become dominated by big companies like Airbnb and Uber. The trajectory of these businesses is rapid growth fueled by venture capital and aimed at disrupting and then monopolizing a market. They disregard important public safety laws and worker protections by treating the workers as independent contractors. They could easily overwhelm the homemade food economy just as they have ride hailing, delivery services and vacation rentals.

Oatfield, who once operated an underground kitchen out of her apartment, seems to believe that once big platform players like Airbnb or Uber get involved in the market, they will inevitably treat home food workers as commodities and take outsized commissions from home cooks when listing their goods on their marketplaces.

While I think it’s good to be suspicious of any large platform player, I’d suggest Oatfield’s suspicion is overblown. Not only are the public safety concerns she lists specifically addressed by a compliance framework for home cooks within the proposed legislation, but I also wonder where her suspicions about the shadowy forces behind AB 626 come from. As far as I can tell, the primary advocates for AB 626 and legalization of cottage food businesses have been the C.O.O.K Alliance, a group founded by the same people who started Josephine, a now-defunct startup lauded universally for the way they treated the cooks on their platform.

And even if Uber or Airbnb did eventually swoop into the home meal sharing market with a platform and charge 15% fees, I would say this: so what? As long as legislation requires that food safety is the paramount concern, I do not doubt that an online marketplace like an “Airbnb for home cooks” would likely open up much more market opportunity than many small food entrepreneurs would otherwise have.

I’ll never forget when I met a woman named Majda, a former Josephine home cook, who told me about her dream of opening a home-based food business so she could retire from her day job at a casino. You see, Majda had trouble standing all day at her casino job and with Josephine, she had the beginnings of what seemed to be a flourishing home food business that would give her greater control over her time and allow her to stay at home. Or at least she did until Washington State forced Josephine to shut down.

While Majda probably would have liked to not pay any transaction fees to Josephine, my guess is that she probably had a much better shot at building a home food business with a platform that matched buyers of home food with home cooks like herself. Now she doesn’t have any way to reach her consumers other than through underground sales of her food.

So, does the cottage food industry need to guard against aggressive tactics by platform providers? Yes, of course. But just as with ride sharing, home sharing, and creator marketplaces, opportunities like this need platforms to match the sellers with the buyers. These platforms need to be built by companies with resources and experience building communities and marketplaces. Without them, the opportunities will never arrive and, as a result, the Madjas of the world will never have a chance to chase their dreams.

Bottom line: the home cook market will have the best chance of flourishing with the combination of a strong legal framework that ensures  both the consumer and entrepreneur’s interests are protected and a platform that brings together buyers with sellers. We’ve all seen the market building power of platforms – whether it’s those made for digital creators like Patreon, artisanal crafters like Etsy or, yes, gig economy workers like Uber – and the lesson learned is these platforms help to create markets that would otherwise stay dormant without them.