2013 was most definitely the year of the meal subscription. From specialty diet and healthy food dinner delivery to dinner kits, investment into the very crowded space just kept flowing. And now, just one week into 2014, meal kit startup Plated announced it’s raised a $5 million Series A round led by ff Venture Capital, with participation from Lerer Ventures, Founder Collective and Great Oaks Venture Capital. The startup previously raised $1.4 million from ff Venture Capital, TechStars and Manischewitz Company CEO Alain Bankier, among others.
Plated delivers weekly-changing boxes that include all of the fresh ingredients and recipes you need to prepare locally sourced, healthy meals right to your door. Customers subscribe for a monthly membership ($10 per month) or an annual membership ($8 per month), and then pay $12 per person per plate. The startup currently delivers to 80% of the US, and plans to grow its team, especially engineers, regional distribution managers and quality control professionals, reports The Wall Street Journal.
At our October Food+Tech Meetup “The Business of Meal Kit Subscriptions,” the startup’s co-founder and co-CEO Nick Taranto presented his company’s model and mission (video above). I also caught up with Taranto via email this week to learn more about Plated’s recent fundraising process and plans for growth.
Food+Tech Connect: What was your fundraising strategy and why do you believe it was successful?
Nick Taranto: Our strategy focused on using our data to raise expansion and growth capital. We are seeing software-style growth in a perishable food business, and we wanted to bring on board partners who understood the complexities of scaling a physical goods business.
FTC: How long was your fundraising process, and what (if any) challenges did you face?
NT: Our process took about three months from start to finish, but I would recommend allocating six months to run a Series A fundraise – you never know what is going to happen. Going from seed investment to the next level requires a very different story and set of data. The Series A crunch is real, but we were able to prove our investment thesis with our traction and proven ability to execute in a complex environment.
FTC: How has your business model evolved since the company’s inception?
NT: It’s much less complex to be a “box of the week” company and to simply deliver whatever is easiest for the business every week. Our competition does this, where there is no choice and you have to cancel a week in advance. But we found that people don’t want to be force fed. 2013 was all about testing, learning and iterating. We found that American customers demand choice and flexibility. As a consequence, we have built a data-driven operational backbone to allow us to scale profitably, while offering a better quality product with more choice and flexibility than anyone else.
FTC: What new features or options may be on the horizon for Plated?
NT: 2014 is going to be all about scale and expansion. More products. More choice. More flexibility. Team Plated is super stoked about what we’re going to build over the next 12 months!