Territory Foods, a marketplace where local restaurants can sell their meals for delivery via subscription, announced yesterday that it has raised a $22 million Series B round of funding. The round was led by U.S. Venture Partners, with participation from Upfront Ventures, Lewis & Clark Ventures, DF Enterprises, S2G Ventures, Gaingles, Middleland Capital, Finistere Ventures and Rethink Food Capital. This brings the total amount of funding raised by the company to $44 million.
Territory is a different from other fresh meal delivery services in that it partners with and sells meals from local chefs and restaurants as a weekly subscription. So instead of going to a restaurant once or twice a week, a customer can choose to order a number of meals in advance. The meals arrived prepared and packaged up, so they only need to be re-heated, adding to the convenience factor.
The company’s subscription service really became important during the pandemic last year, as restaurants were forced to close their dine-in operations. Territory offered those restaurants and chefs an added revenue stream by creating and assisting with this D2C shipping channel. The chefs and restaurants make the meals and Territory takes care of all the logistics like ordering, packaging and delivery. Not only could Territory provide more orders, but those orders were also frontloaded and batched. This smoothed out revenue volatility from night to night and gave chefs more time to prepare.
In addition to creating another sales channel for chefs and restaurants, Territory can also extend their geographic reach. A San Francisco restaurant may only deliver hot meals to certain neighborhoods, but Territory can delivered the packaged versions meals more widely throughout the Bay Area.
As we come out of the pandemic, one has to wonder what will happen to prepared meal delivery services like Territory Foods and Freshly (which was acquired by Nestlé). With the ability to once again eat out at restaurants — and with other people — will consumers still want to order a week’s worth of prepared meals? Or have they gotten so hooked on prepared meal delivery that they won’t let their subscription go? We’re about to find out.
Territory already serves 20 markets across the U.S. including Miami, Los Angeles and Washington D.C. The company told Crunchbase News that it will use its new funding to expand into new cities as well as invest in technology and food as medicine initiatives.