Green Chef is seeking new funding amid surging interest in U.S. food delivery companies driven by Blue Apron Holdings Inc’s upcoming initial public offering and Amazon.com Inc’s $13.7 billion deal to buy Whole Foods Market Inc.
Green Chef, a meal kit company focused on organic and healthy items, has already raised $67 million and is about to launch a process to raise at least $50 million more, Chief Executive Michael Joseph said in an interview.
Amazon’s Whole Foods deal “sent a tidal wave” through the food industry, Joseph said, but he does not expect it to hurt meal kit companies, since they cater to a niche group of consumers with specific tastes. With such a small percentage of food currently being purchased online, there may be room for many players to grow, he added.
Boulder, Colorado-based Green Chef is close to hiring a financial adviser to hold talks with strategic and financial investors, Joseph said.
While Green Chef is on track to generate $100 million in revenue this year, it is not profitable because it is reinvesting in its business, he said. He declined to comment on the company’s valuation.
While Green Chef would like to raise money to fund expansion, it could also look to be acquired, Joseph said.
“If we find a buyer who is betting big into organic and wants to help grow this company, I’d be a fool to say, No, we wouldn’t look, especially with market conditions like this where companies scrambling to get into the space,” he said.
Meal kit delivery companies, which sell subscription services that deliver ingredients and recipes designed to let customers easily prepare meals at home, have grown in popularity in the last few years.
A host of young companies such as HelloFresh, Plated, Home Chef, Sun Basket and Chef’d have crowded into the space. Blue Apron, the meal kit industry’s biggest company, is seeking a valuation of up to $3.2 billion, roughly three times its forward revenue, in an IPO this week.
Green Chef differentiates itself by focusing on organic and healthy ingredients, some of which are delivered already chopped. It also makes its own sauces and has manufacturing plants in Colorado and New Jersey.
Green Chef was founded by Joseph in 2014. Previous investors in the company include venture capital firms such as New Enterprise Associates, Greenspring Associates and a division of the Future Fund, the sovereign wealth fund of Australia.
(Reporting by Liana B. Baker in San Francisco; Editing by Leslie Adler)