No meal kit malaise at Sun Basket
Meal kit providers are having a tough time growing sales and keeping up with customer demands, but Sun Basket seems to be an outlier.
The company just announced a Series D investment of $42.8 million led by August Capital. Sun Basket also recently raised $15M in Debt Financing from Trinity Capital Investment, bringing the total new funding to $57.8M. With two new facilities launching in early 2018, Sun Basket will have the capacity to build a $1B revenue business.
Sun Basket is the fastest-growing healthy meal kit delivery service in the United States. In fact, the company grew faster than Airbnb, Uber, and Zappos within its first two years of launch. Over the last 12 months, the company grew net revenue by more than 280 percent, hitting $250 million in annual revenue run rate (ARR) at the beginning of Q1 2018.
While Blue Apron's stock plummets and other companies report customer retention problems, Sun Basket's unique focus on leveraging customer data to create a personal, healthy cooking experience is setting it apart from its peers.
Importantly, Sun Basket's direct-to-consumer service aimed at organic and clean eating, the fastest growing sectors in food business, is allowing the company to scale rapidly. The company's diet-specific meal plans personalized to its customers' unique lifestyle needs is creating a highly "sticky" business model. Plus, its ability to reach 98 percent of the continental U.S. with three distribution centers is developing a fundamentally more capital efficient, structurally superior margin model vis-à-vis the traditional grocery model.
"Over the past year, Sun Basket has grown immensely in customers served, products offered, team size, and overall sales," said Adam Zbar, CEO and co-founder of Sun Basket. "As we scale the business in 2018, we are excited to have August Capital on board, given its track record of helping numerous innovative companies grow while maintaining strong unit economics and great product quality."
Sun Basket says the new funding will be used to further build a true foodtech company that provides customers even more choice and personalizes their Sun Basket meals by leveraging their transaction data, dietary needs, and preferences. In 2018, Sun Basket will continue expanding its Healthy Personal Choice Platform, furthering its mission of becoming the "Netflix of Food." Along with expanding its offerings focused on personalized nutrition through food, with the introduction of Vegan, Mediterranean, and Pescatarian menu offerings, the meal kit innovator is also launching new, larger distribution centers on the East Coast and in the Midwest in Q1 2018. Sun Basket will also maintain a laser focus on solving key needs for consumers, such as making healthy cooking easy, delicious, and personalized to their lifestyle and dietary needs.
August Capital's partnership brings a wealth of experience in scaling tech companies, including Zulily, BarkBox, Turo, Fastly, Avant, and more. With the investment in Sun Basket, Tripp Jones, general partner of August Capital, has joined the company's board of directors.
"Sun Basket has achieved incredible growth and industry-leading unit economics in just a few years since launch," added Jones. "We're thrilled to partner with Sun Basket in its next phase as the company continues to scale rapidly and build out its healthy personal choice platform, which has the power to disrupt the $650 billion grocery market by providing consumers a healthier, easier, and more personal way to cook and eat delicious food."
The round also included Sapphire Ventures, Accolade Partners, Founders Circle, Rembrandt Venture Partners, Vulcan Capital, Relevance Capital, Unilever Ventures, and Correlation Ventures.