Plant-based food startup Next Gen lands $10M seed round from investors including Temasek

Singapore is quickly turning into a hub for food-tech startups, partly because of government initiatives supporting the development of meat alternatives. One of the newest entrants is Next Gen, which will launch its plant-based “chicken” brand, called TiNDLE, in Singaporean restaurants next month. The company announced today that it has raised $10 million in seed funding from investors including Temasek, K3 Ventures, EDB New Ventures (an investment arm of the Singapore Economic Development Board), NX-Food, FEBE Ventures and Blue Horizon.

Next Gen claims this is the largest seed round ever raised by a plant-based food tech company, based on data from PitchBook. This is the first time the startup has taken external investment, and the funding exceeded its original target of $7 million. Next Gen was launched last October by Timo Recker and Andre Menezes, with $2.2 million of founder capital.

Next Gen’s first product is called TiNDLE Thy, an alternative to chicken thighs. Its ingredients include water, soy, wheat, oat fiber, coconut oil and methylcellulose, a culinary binder, but the key to its chicken-like flavor is a proprietary blend of plant-based fats, like sunflower oil, and natural flavors that allows it to cook like chicken meat.

Menezes, Next Gen’s chief operating officer, told TechCrunch that the company’s goal is to be the global leader in plant-based chicken, the way Impossible and Beyond are known for their burgers.

“Consumers and chefs want texture in chicken, the taste and aroma, and that is largely related to chicken fat, which is why we started with thighs instead of breasts,” said Menezes. “We created a chicken fat made from a blend, called Lipi, to emulate the smell, aroma and browning when you cook.”

Both Recker and Menezes have years of experience in the food industry. Recker founded German-based LikeMeat, a plant-based meat producer acquired by the LIVEKINDLY Collective last year. Menezes’ food career started in Brazil at one of the world’s largest poultry exporters. He began working with plant-based meat after serving as general manager of Country Foods, a Singaporean importer and distributor that focuses on innovative, sustainable products.

“It was clear to me after I was inside the meat industry for so long that it was not going to be a sustainable business in the long run,” Menezes said.

Over the past few years, more consumers have started to feel the same way, and began looking for alternatives to animal products. UBS expects the global plant-based protein market to increase at a compounded annual growth rate of more than 30%, reaching about $50 billion by 2025, as more people, even those who aren’t vegans or vegetarians, seek healthier, humane sources of protein.

Millennial and Gen Z consumers, in particular, are willing to reduce their consumption of meat, eggs and dairy products as they become more aware of the environmental impact of industrial livestock production, said Menezes. “They understand the sustainability angle of it, and the health aspect, like the cholesterol or nutritional values, depending on what product you are talking about.”

Low in sodium and saturated fat, TiNDLE Thy has received the Healthier Choice Symbol, which is administered by Singapore’s Health Promotion Board. Next Gen’s new funding will be used to launch TiNDLE Thy, starting in popular Singaporean restaurants like Three Buns Quayside, the Prive Group, 28 HongKong Street, Bayswater Kitchen and The Goodburger.

Over the next year or two, Next Gen plans to raise its Series A round, launch more brands and products, and expand in its target markets: the United States (where it is currently recruiting a growth director to build a distribution network), China, Brazil and Europe. After working with restaurant partners, Next Gen also plans to make its products available to home cooks.

“The reason we started with chefs is because they are very hard to crack, and if chefs are happy with the product, then we’re very sure customers will be, too,” said Menezes.

Ag monitoring startup Flurostat merges with soil carbon expert Dagan to form Regrow

Flurostat and Dagan, two startups that both are tackling the monitoring and management of agricultural inputs and outputs for a better understanding of the role sustainable agriculture can play in reducing greenhouse gas emissions, have merged and are launching a package of services under a new brand, Regrow.

The merge, announced yesterday, will create a company that combines Flurostat’s data driven agriculture management services with Dagan’s soil biogeochemical modeling technology, the companies said in a joint statement. 

The combined companies will have the ability to provide satellite collected data to optimize crop management and adoption of conservation practices along with site-specific analysis and custom interventions for different crops, fields, farms, and regions.

Dagan co-founder Dr. William Salas said that the combined companies will be able to have a better handle on the market for carbon emissions — thanks in no small part to Dagan’s work on soil carbon.

“Soil carbon sequestration is finally emerging as a globally relevant strategy for drawing down excess atmospheric carbon dioxide. Shortcuts, misconceptions and over-hyping have the potential to stunt the tremendous potential of soil carbon,” Salas said in a statement. “But the merger of FluroSat and Dagan will give the industry the confidence and integrity it needs with best-in-class soil health data that can prescribe site-specific strategies and provide accuracy and transparency that will help companies succeed in carbon markets.”

Terms of the merger were not disclosed, but FluroSat had previously raised roughly $8.6 million in equity and grant funding led by Microsoft’s M12 venture fund, according to data from Crunchbase.

“Over the next decade, we need to grow and produce enough food to nourish 10 billion people around the world in a way that protects our land and stems climate change,” says Ranveer Chandra, Chief Scientist, Azure Global at Microsoft. “Regrow’s computational agriculture, using machine learning and scientific modeling, will help improve the accuracy of accounting for soil carbon, and bring farmers closer to benefitting from carbon markets.”

 

Maple launches with $3.5 million in funding to become the SaaS backoffice for the family

Much of our daily lives have been transformed in one way or another by technology – and often through intentional efforts to innovate thanks to the advent of new technology. Now more than ever, we rely on shared collaboration platforms and digital workspaces in our professional lives, and yet most of the changes wrought by tech on our home and family lives seem like the accidental effects of broader trends, rather than intentional shifts. Maple, a new startup launching today, aims to change that.

Founded by former Shopify product director and Kit (which was acquired by Shopify in 2016) co-founder Michael Perry, Maple is billed as “the family tech platform,” and hopes to ease the burden of parenting, freeing up parents, aunts, uncles, grandparents and kids to spend more quality time together. The startup, which is launching its app on iPhone and Android for all and onboarding new users from its waitlist over the next few weeks, has raised $3.5 million in seed funding – an impressive round for a company just about seven months into its existence. The round was led by Inspired Capital, and includes participation by Box Group, but is also supported by a number of angels who were Perry’s former colleagues at Shopify, including Shopify President Harley Finkelstein.

Perry and his co-founder Mike Taylor, who also co-founded Kit, decided to leave Shopify in order to pursue Perry’s vision of a platform that can help parents better manage their family lives – a platform made up of a social layer, a task-focused list of shared responsibilities, and a bourgeoning service marketplace that looks and feels a lot like the ecosystem Shopify has built for empowering e-commerce entrepreneurs. That’s by design, Perry says.

“I think you’re gonna see a lot of Shopify inspiration in this product – we think we’re the back office of every family,” Perry told me in an interview. “And we think we’re building the app ecosystem of apps, services, all kinds of things that are going to live on this platform that’s going to revolutionize parenting.”

In its current early incarnation, Maple’s primary interface for parents is a list of various tasks they need to take care of during the day. During onboarding, Maple asks parents what they’re typically responsible for in the household, and then uses some basic machine learning behind the scenes to build a customized schedule for getting those things done. Maple has signed on three initial partners to assist with accomplishing some of these tasks, including Evelyn Rusli’s Yumi food and nutrition brand for infants; Lalo, a DTC baby and toddler furniture and gear brand; and Haus, which will be providing date night packages for parents to enjoy for some getaway time.

Maple co-founder Micheal Perry with his son.

The platform will offer users the ability to tap others for help with tasks – these could be other family members added to the household, or the partners mentioned above (the plan is to bring on more, but to gate admittance initially while developing API endpoints that any company can potentially tap into). When interacting with family members, Maple also encourages smalls social interactions, like thanking someone for their help on a particular task or just showing general appreciation. Perry says this is a key ingredient he prioritized in product design.

“We have this cool thing that every day at eight o’clock, we give you an end of the day recap with your family,” Perry said. “So you click on it, and it will show me that, for example, Alex [Perry’s wife] completed three responsibilities for our family today, and how many I did for my family today, and how much help I received from other people today. And directly in app, you can send these cool little ‘Thank you ‘messages and say, you know, I love you, I appreciate you – we’re a great team. And Alex will get those messages. We believe in a world where this can be incredibly dynamic, in many different ways kto kind of bring some love and appreciation and make parenting feel more rewarding and easier.”

Perry is quick to note that what Maple offers today is only the beginning, and it’s clear he has bold ambitions for the platform. He talked about building “the family graph,” or a trove of data that can be used to not only build intelligent recommendations and develop ever more advanced machine learning to optimize family management, but also to provide partners with the tools they need to build products to best serve families. I asked Perry what that means for privacy, given that people are likely to be far more reluctant to share info around their families than they are about their work lives. He said the they team plans to go slow in terms of what it exposes to partners, when, and how, and that they’ll have user privacy in mind at each step – since, after all, Perry himself is a father and a husband and is wary of any incursions on his own private life.

For now, partners like Yumi only receive what users share with them through their own account creation and login mechanism, and they only pass back a basic attribution token – essentially letting Maple know the task was completed so it can mark it off in a user’s list.

Image Credits: Maple

Maple’s partners today are representative of the kind of businesses that might make use of the platform in future, but Perry has a much broader vision. He hopes that Maple can ultimately help parents handle their responsibilities across a wide range of needs and income levels. Right now, Perry points out, a lot of what’s available to parents in terms of support is only available to higher income brackets – ie., nannies and dedicated caregivers. Perry says that his experience growing up relatively poor with a young mother supporting the family while his father worked long hours led him to want to provide something better.

“You have 125 million households in America, you have 3 million children being born every year, you have 30% of the households in America being single parent-run households,” Perry said. “It’s hard. Some people are working one two jobs, most couples are working couples. Every industry that’s changed has been about making things more accessible. In the case of Shopify, at one point building, an online store required hundreds of thousands of dollars and a bunch of skilled people. Now you can start a store for $20 in five minutes – 20 years ago, that was unfathomable.”

For Perry, Maple represents a path to that kind of shift in the economics of parenting and a network of family services, including goods, care, leisure and more. The startup has plans to eventually enlist other parents to provide services, which Perry says will unlock part-time income generation for full-time parents, allowing parents to help each other at the same time.

I asked him if he thought people would be reluctant to treat their family lives with the same kind of optimization approach favored by enterprise and commercial platform tools, but he suggested that in fact, not taking advantage of those same technologies in our personal lives is a missed opportunity.

“We believe that, uniquely, we’re living through a generation where we can start creating more time for people,” Perry said. “I think what makes Maple so unique is that no company has approached this by asking ‘How do we create more time for you so that you can spend more time with your kids?’ in the consolidated way that we have.”

Disclosure: I worked at Shopify from 2018 to 2019 while Perry was employed there, but we did not work together directly.

India’s Zomato valued at $5.4 billion in new $250 million investment

Zomato has raised $250 million, two months after closing a $660 million Series J financing round, as the Indian food delivery startup builds a war-chest ahead of its IPO later this year.

Kora (which contributed $115 million), Fidelity ($55 million), Tiger Global ($50 million), Bow Wave ($20 million), and Dragoneer ($10 million) pumped the new capital into the 12-year-old Gurgaon-headquartered startup, Info Edge, a publicly listed investor in Zomato, disclosed in a filing (PDF) to a local stock exchange. The new investment gives Zomato a post-money valuation of $5.4 billion, up from $3.9 billion in December last year, said Info Edge, which owns 18.4% stake in the Indian startup.

The new investment reinforces the strong confidence investors have in Zomato, which struggled to raise money for much of last year. Zomato, which acquired the Indian food delivery business of Uber early last year, competes with Prosus Ventures-backed Swiggy (valued at about $3.6 billion) in India. Together they work with over 440,000 delivery partners, a larger workforce than that employed by Indian Department of Posts.

A third player, Amazon, also entered the food delivery market in India last year, though its operations are still limited to parts of Bangalore.

At stake is India’s food delivery market, which analysts at Bernstein expect to balloon to be worth $12 billion by 2022, they wrote in a report to clients. With about 50% of the market share, Zomato is the current leader among the three, Bernstein analysts wrote.

“We find the food-tech industry in India to be well positioned to sustained growth with improving unit economics. Take-rates are one of the highest in India at 20-25% and consumer traction is increasing. Market is largely a duopoly between Zomato and Swiggy with 80%+ share,” wrote analysts at Bank of America in a recent report, reviewed by TechCrunch.

Zomato and Swiggy have improved their finances in recent years, which is especially impressive because making money with food delivery is very even more challenging in India. Unlike Western markets such as the U.S., where the value of each delivery item is about $33, in India, a similar item carries the price tag of $3 to $4, according to research firms.

Both the startups eliminated hundreds of jobs last year as coronavirus pandemic hit their businesses. Zomato co-founder and chief executive Deepinder Goyal said in December that the food delivery market was “rapidly coming out of COVID-19 shadows.”

“December 2020 is expected to be the highest ever GMV month in our history. We are now clocking ~25% higher GMV than our previous peaks in February 2020. I am supremely excited about what lies ahead and the impact that we will create for our customers, delivery partners, and restaurant partners,” he said.

In an email to employees in September last year, Goyal said Zomato was working on its IPO for “sometime in the first half” of 2021 and was raising money to build a war-chest for “future M&A, and fighting off any mischief or price wars from our competition in various areas of our business.”

YC-backed Taste brings multicourse fine dining into your home

Jeff Chen has a pithy pitch for his new startup Taste: “We made the Instagram of nice food.”

In other words, just as Instagram made it easy for regular smartphone users to look like talented photographers, Taste makes it easy for customers to prepare impressive meals at home.

That’s because the real preparation is being done by fine-dining restaurants — Chen told me there are 16 Michelin-starred and Michelin-rated restaurants currently on the platform — whose food doesn’t translate easily to a delivery or takeout experience. Taste offers “dinner kits,” which Chen said are neither standard takeout (where everything has been fully prepared but doesn’t necessarily travel well) or a regular meal kit (where “everything is separate and raw”).

Instead, he suggested Taste’s dinner kits are “this in-between thing” where the food is mostly, but not entirely, prepared in advance, allowing customers to “heat and assemble much faster.”

Taste screenshot

Image Credits: Taste

For example, when I tried out Taste last week, my girlfriend and I received three-course meals from Intersect by Lexus and its “restaurant in residence” The Grey. A couple of the (delicious) courses and sides had to be heated in the oven or the microwave for five, 10 or 20 minutes, but there was no real prep or cooking required — the real work was cleaning up afterward.

Even the packaging was impressive (if a little overwhelming), with a large, fancy box for each kit, and then individual packages for each course, plus a separate package for spices. There are optional wine pairings, and some restaurants will also provide plating instructions and a Spotify playlist for the meal.

Taste — which is part of the winter 2021 batch of startups at Y Combinator — is currently New York City-only, where it works with restaurants including Dirt Candy, Meadowsweet and the Musket Room. As you might expect, these kits cost more than your standard dinner delivery. Many of them are in the $60-to-$100 per person range, although there are also dinners below $40, as well as a la carte options.

Chen (who sold his last startup Joyride to Google) said that he and his co-founder Daryl Sew have been excited to help New York City chefs reinvent their offerings for delivery and weather the pandemic.

Taste founders Daryl Sew, Jeff Chen

Taste founders Daryl Sew and Jeff Chen. Image Credits: Taste

“We also do a very key thing, which is pre-ordering and batching for the restaurant,” he added. “When a restaurant works with Taste, all the orders come in two days before to the restaurant, and we pick it up at designated times, which helps tremendously with capacity lift.”

And while Taste might seem particularly appealing now, when indoor fine dining options are either illegal, unsafe or transformed by social distancing and mask-wearing, Chen anticipates healthy demand even after the pandemic. After all, he suggested that before COVID-19, there were many people — busy parents, for example, or people who work long hours — who felt like they couldn’t take advantage of these restaurants as often as they wanted, or at all.

“Everything is getting moved into the home,” he said. “Movies are getting moved into the home with Netflix, workouts are getting moved into the home with Peloton and Tonal, and now we’re going to move nice dining experiences into the home.”

Tata Group reaches agreement to buy majority stake in BigBasket

Indian conglomerate Tata Group has reached an agreement to acquire a majority stake in grocery delivery startup BigBasket, a source familiar with the matter told TechCrunch.

The salt-to-software giant is buying over 60% stake in BigBasket, valuing the Indian startup between $1.8 billion to $2 billion, the source said, requesting anonymity as the deal is still private. BigBasket had raised over $720 million prior to the deal with Tata.

Indian news network ET Now reported on Tuesday that the two firms were in advanced talks, signals of which began to emerge in local media two quarters ago. Two BigBasket co-founders and Tata Group did not respond to a request for comment.

Chinese backer Alibaba and a handful of other investors are getting a near complete exit from BigBasket as part of the deal, the source said.

The move comes as Tata Group looks to expand to more consumer businesses and works to develop a so-called superapp in the world’s second largest internet market.

Bangalore-headquartered BigBasket, which competes with SoftBank-backed Grofers and Reliance’s JioMart, operates in over two dozen cities in India and turned profitable months into the coronavirus pandemic as sales skyrocketed on the platform.

In a recent note to clients, Bank of America analysts estimated that the online grocery delivery market could be worth $12 billion in India by 2023.

“Competition is high in the sector with large verticals like BigBasket/Grofers and horizontal like Amazon/Flipkart trying to convert the unorganized market to organized one. Based on media articles, till recently the No 1 player in the space was BigBasket, ,with it hitting $1 bn annualized GMV & selling over 300K orders every day. RIL also threw its hat with the company launching its JioMart app in May-20 across 200 cites,” they wrote.

This is a developing story. More to follow…

Tata Group reaches agreement to buy majority stake in BigBasket

Indian conglomerate Tata Group has reached an agreement to acquire a majority stake in grocery delivery startup BigBasket, a source familiar with the matter told TechCrunch.

The salt-to-software giant is buying over 60% stake in BigBasket, valuing the Indian startup between $1.8 billion to $2 billion, the source said, requesting anonymity as the deal is still private. BigBasket had raised over $720 million prior to the deal with Tata.

Indian news network ET Now reported on Tuesday that the two firms were in advanced talks, signals of which began to emerge in local media two quarters ago. Two BigBasket co-founders and Tata Group did not respond to a request for comment.

Chinese backer Alibaba and a handful of other investors are getting a near complete exit from BigBasket as part of the deal, the source said.

The move comes as Tata Group looks to expand to more consumer businesses and works to develop a so-called superapp in the world’s second largest internet market.

Bangalore-headquartered BigBasket, which competes with SoftBank-backed Grofers and Reliance’s JioMart, operates in over two dozen cities in India and turned profitable months into the coronavirus pandemic as sales skyrocketed on the platform.

In a recent note to clients, Bank of America analysts estimated that the online grocery delivery market could be worth $12 billion in India by 2023.

“Competition is high in the sector with large verticals like BigBasket/Grofers and horizontal like Amazon/Flipkart trying to convert the unorganized market to organized one. Based on media articles, till recently the No 1 player in the space was BigBasket, ,with it hitting $1 bn annualized GMV & selling over 300K orders every day. RIL also threw its hat with the company launching its JioMart app in May-20 across 200 cites,” they wrote.

This is a developing story. More to follow…

After raising $150 million in equity and debt, Nature’s Fynd opens its fungus food for pre-orders

Nature’s Fynd, the food technology company with a new food offering cultivated from fungus found in the wilds of Yellowstone National Park, is releasing its first products for pre-order. 

Pitching both a non-dairy cream cheese and meatless breakfast patties, Nature’s Fynd had managed to attract some serious investors including Al Gore’s Generation Investment Management and the Bill Gates-backed investment fund, Breakthrough Energy Ventures. The company most recently raised $80 million in its last round of funding.

The company is part of a wave of innovative products using a range of bacteria, fungi, and plants to create meat alternatives.  Last year, companies developing meat alternatives raised well over $1 billion in financing and investors show no sign of slowing down in their commitments to the industry.

The commercial launch of the Fy Breakfast Bundle, vegan and non-GMO alternatives to traditional breakfast products will be the first commercial test for Nature’s Fynd as it looks to go to market.

These limited release bundles are available for $14,99 plus shipping, according to the company, and the products will be available across the 48 contiguous U.S. states.

The company’s product is grown using fermentation technology to cultivate the bacteria that Nature’s Fynd’s chief scientists discovered during their research into organisms around Yellowstone National Park.

Nature’s Fynd touts the resilience and efficiency of the microbe it discovered, leading to a more sustainable production process that uses a fraction of the land, water, and energy resources that traditional animal husbandry requires, the company said.

“We choose optimism so that we can find a way to do more with less. Using our novel liquid-air surface fermentation technology, we’re creating a range of sustainable foods that nourish our bodies and nurture our planet for generations to come. We’re really excited to be at the beginning of this journey with the launch of our first-ever limited release of Fy Breakfast Bundles,” said Nature’s Fynd CEO Thomas Jonas. “We’ve deeply studied our consumers and we know that Fy’s unique versatility, which delivers great tasting meat and dairy alternatives for every occasion, is highly appealing.” 

Nature’s Fynd chief executive, Thomas Jonas. Image Credit: Nature’s Fynd

Planning 500,000 charging points for EVs by 2025, Shell becomes the latest company swept up in EV charging boom

Shell’s plan to roll out 500,000 electric charging station in just four years is the latest sign of an EV charging infrastructure boom that has prompted investors to pour cash into the industry and inspired a few companies to become public companies in search of the capital needed to meet demand.

Since the beginning of the year, three companies have been acquired by special purpose acquisition vehicles and are on a path to go public, while a third has raised tens of millions from some of the biggest names in private equity investing for its own path to commercial viability.

The SPAC attack began in September when an electric vehicle charging network ChargePoint struck a deal to merge with special-purpose acquisition company Switchback Energy Acquisition Corporation, with a market valuation of $2.4 billion. The company’s public listing will debut February 16 on the New York Stock Exchange.

In January, EVgo, an owner and operator of electric vehicle charging infrastructure, agreed to merge with the SPAC Climate Change Crisis Real Impact I Acquisition for a valuation of $2.6 billion— a huge win for the company’s privately held owner, the power development and investment company LS Power. LS Power and EVgo management, which today own 100% of the company will be rolling all of its equity into the transaction. Once the transaction closes in the second quarter, LS Power and EVgo will hold a 74% stake in the newly combined company.

One more deal soon followed. Volta Industries agreed to merge this month with Tortoise Acquisition II, a tie-up that would give the charging company named after battery inventor Alessandro Volta a $1.4 billion valuation. The deal sent shares of the SPAC company, trading under the ticker SNPR, rocketing up 31.9% in trading earlier this week to $17.01. The stock is currently trading around $15 per-share.

 

Not to be outdone, private equity firms are also getting into the game. Riverstone Holdings, one of the biggest names in private equity energy investment, placed its own bet on the charging space with an investment in FreeWire. That company raised $50 million in new round of funding earlier this year.

“The writing is on the wall and the investors have to take the time. There’s been a flight out of the traditional investment opportunities in markets,” said FreeWire chief executive, Arcady Sosinov, in an interview. “There’s been a flight out fo the oil and gas companies and out fo the traditional utilities. You have to look at other opportunities… This is going to be the largest growth opportunity of the next ten years.”

FreeWire deploys its infrastructure with BP currently, but the company’s charging technology can be rolled out to fast food companies, post offices, grocery stores, or anywhere where people go and spend somewhere between 20 minutes and an hour. With the Biden Administration’s plan to boost EV adoption in federal fleets, post offices actually represent another big opportunity for charging networks, Sosinov said.

“One of the reasons we find electrification of mobility so attractive is because it’s not if or how, it’s when,” said Robert Tichio, a partner at Riverstone in charge of the firm’s ESG efforts. “Penetration rates are incredibly low… compare that to Norway or Northern Europe. They have already achieved double digit percentages.”

A recent Super Bowl commercial from GM featuring Will Farrell showed just how far ahead Norway is when it comes to electric vehicle adoption. 

“The demands onc capital in the electrification of transport will begin to approach three quarters of a trillion annually,” Tichio said. “The short answer to your question is that the needs for capital now that we have collectively, politically, socially economically come to a consensus in terms of where we’re going and we couldn’t say that 18 months ago is going to be at a tipping point.”

Shell already has electric vehicle charging infrastructure that it has deployed in some markets. Back in 2019 the company acquired the Los Angeles-based company Greenlots, an EV charging developer. And earlier this year Shell made another move into electric vehicle charging with the acquisition of Ubitricity in the UK.

“As our customers’ needs evolve, we will increasingly offer a range of alternative energy sources, supported by digital technologies, to give people choice and the flexibility, wherever they need to go and whatever they drive,” said Mark Gainsborough, Executive Vice President, New Energies for Shell, in a statement at the time of the Greenlots acquisition. “This latest investment in meeting the low-carbon energy needs of US drivers today is part of our wider efforts to make a better tomorrow. It is a step towards making EV charging more accessible and more attractive to utilities, businesses and communities.”

 

Tovala, the smart oven and meal kit service, heats up with $30M more in funding

With more of us spending significant amounts of time at home because of Covid-19, our attention has turned increasingly to how and what we eat. Today, one of the startups that has seen a lift in its business as a result of that is announcing a round of funding to expand its operations.

Tovala, the smart oven and meal kit service — has closed a Series C of $30 million. David Rabie, the Chicago startup’s co-founder and CEO, told TechCrunch that it plans to use the funding in large part to open a second facility, most likely in Utah, to help with fresh food distribution to the western half of the U.S. Other investments will include improving customer service and bringing in more talent.

It will also slowly start to bring in more options for pre-made meals and recipes: Rabie said it is working on ways of working with leading restaurants and chefs to create meals to sell and cook in the Tovala oven.

“We think we can come closer to the restaurant experience because of the oven,” said Rabie. “By pre-making food rather than just reheating, we think we can open up reach for a local restaurant.”

The funding is being led by Left Lane Capital, with Finistere Ventures, Comcast Ventures, OurCrowd, Origin Ventures, Pritzker Group Venture Capital, and Joe Mansueto — all previous backers — also participating.

Originally incubated a Y Combinator, Tovala has attracted other interesting investors in the company, including poultry giant Tyson. Notably, this is the second round of funding for the startup in the space of six months, after it picked up $20 million in a Series B last June.

As with that round, the valuation is not being disclosed, but the company has hit some significant numbers, evidenced by this funding, which points to how its value may well be on the rise. Annualized revenue grew tenfold in the last 18 months (that is, including growth before Covid-19); employee numbers were up 40%; the company has passed 3 million meals shipped; and the company says that their ovens are being used 32 times on average each month by their owners (stats it can rack up because those devices are connected).

It is still not disclosing total user numbers, Rabie said.

Tovala’s oven sells for $299, but the company usually knocks off $100 if you also commit to six of its $11.99 meals over the next six months. Right now — possibly to tap into the wave of people who are rethinking how they eat in the wake of restaurant closures and simply spending more time at home — it seems Tovala is offering discounts of up to $130 to those buying the oven without the meal obligation, dropping the oven price down to about $170.

In addition to the company’s own pre-made meals, Tovala’s oven can cook hundreds of pre-made dishes and meals sold in stores by way of scanning package barcodes; and recipes that it devises and you can make yourself and program the oven to cook by way of the Tovala app. You can also use it in the same way that you might use any countertop oven, to toast, steam, bake and broil whatever you choose to independent of all that.

A profusion of meal kit and food delivery businesses have changed how a lot of people think about food at home, and Tovala has been building out a business in the hopes that it can cover a specific niche: people who want to eat fresh food they cook at home, but who don’t have time or interest in putting those meals together — not even when they come with items precut and measured by meal kit companies.

However, that is just one side of the business: Tovala’s ovens, Rabie said, are a central part of the vertical integration that the company has built, and they are here to stay as part of the proposition.

“We are in the business of getting high quality meals to people, and the oven is our vehicle for doing that,” he said. “We are both a tech and food company, and at no point do I see us getting out of oven business.”

Having said that, the company is also expanding with partnerships with others that produce ovens, too. Specifically, Tovala has a deal with LG to embed its software in LG ovens, to enable them to cook Tovala’s meals and the other dishes that can be programmed with its app an barcode scanning system. Rabie said the deal made sense since the kinds of full-sized ovens that will run Tovala’s software are “not the kind of product line that we will get into.”

It appears that LG is not an investor, and it’s not clear when these new devices will be rolled out: the deal between the two was announced back in 2019.

That partnership is a mark of how the hardware companies that are building connected appliances, and services around them, are knitting together more closely with incumbents to take their next scaling steps. In at lest two instances that has led to those startups getting acquired: BBQ giant Weber acquired June (which it had also invested in) earlier this year; and previously Electrolux acquired pressure cooker company Anova for $250 million.

An exit of that kind may or may not be on the menu for Tovala, but it’s a signal of the options that the startup has for moving from appetiser to main course in the future.

Rabie had told me that Left Lane’s interest was based on how it saw Tovala as a “Peloton”-like category definer for smart food preparation at home, in part because of how it could become part of a person’s daily habits and routines.

“The pairing of a meal subscription with a connected device has enabled Tovala to achieve a customer retention rate that is a step-function better than anything else we’ve seen in food delivery — in many ways similar to what Peloton achieved in a traditionally low-retention fitness industry,” said Jason Fiedler, co-founder and managing partner at Left Lane Capital, in a statement. “Our team brings a proven track record of investing in category-defining consumer subscription businesses, and we’re excited about Tovala’s potential to be the next major food tech company.” Fiedler is joining the board.