Venture Capital: Nestle USA Acquires Meal Delivery Startup Freshly For Potentially $1.5B
Freshly currently ships more than 1 million meals per week across 48 states in the U.S.
Nestle USA, which is ultimately owned by Nestle SA (SWX: NESN), on Friday, signed and closed its acquisition of Freshly, a startup that provides healthy, fresh-prepared, and chef-cooked meals that are heat-and-eat in three minutes or less. Freshly’s pioneering direct-to-consumer service is subscription-based in the range of $45.96 to $101.88 per week. (Crunchbase)
Nestle will pay $ 950 million for the purchase, and potentially another $550 million depending upon the startup’s growth in the future.
Freshly benefits from the new normal
More and more people are working and learning from home – the new normal triggered by the COVID-19 pandemic. Persons without cooking skills, or the time to cook, are ordering out for their meals.
Freshly’s fresh and healthy meals delivered home can be a boon for such people.
“Consumers are embracing e-commerce and eating at home like never before,” said Nestlé USA Chairman and CEO, Steve Presley in a statement. “It’s an evolution brought on by the pandemic but taking hold for the long term.”
Freshly ships more than one million meals per week to customers in 48 states. Its 2020 forecasted sales are US$ 430 million.
This year it also expanded into a B2B service to cater to companies distributing meals to their employees working from home.
Freshly had so far raised $107 million from investors, according to Tech Crunch. These included Highland Capital Partners, White Star Capital, Insight Venture Partners, and Nestlé.
Nestle led a Series C investment in the startup in 2017, its investment giving it a 16% stake.
The move now to acquire all of Freshly sits with the multinational’s strategy to “capitalize on the new realities in the U.S. food market and further positions Nestlé to win in the future.”
Nestle also said it was familiar with, and knew how to grow, the U.S. at-home food market. The acquisition expanded its ability to deliver delicious food to its consumers “when and where they want.”
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