Internet and telecommunications conglomerate SoftBank’s Vision Fund 2 has invested $100m in UK-based meal kit subscription service Gousto, Sky News has reported, as consumer attitudes shift further to convenience in their eating habits.
The company has also obtained $50m in debt financing from financial services firms Barclays and HSBC. The round reportedly values it at $1.75bn and sources told Sky that SoftBank’s investment was made up of a combination of new and secondary share purchases.
Gousto provides a subscription service that delivers kits complete with chef-prepared recipes and the precise ingredients needed to prepare each meal, with a focus on healthier eating, with input from fitness coach Joe Wicks.
Meal kit services have been popular for over a decade as consumers, particularly among younger demographics, have shown a higher appetite for a happy medium between grocery shopping and ordering takeaway.
The sector has also experienced tailwinds from the covid-19 pandemic, particularly during lockdown times when restaurants and eateries were shut down.
According to Grand View Research, the meal kit delivery market was valued at over $10bn in 2020 and is forecasted to grow at a compound annual growth rate of 13% between 2021 and 2028.
Perhaps the biggest name in the meal kit market on either side of the Atlantic is Germany-based HelloFresh, which went public on the Frankfurt Stock Exchange in 2017 and which currently has a market capitalisation of about $11.6bn.
Not all listings in the space have been successful, however. US-based meal kit service Blue Apron, itself a unicorn that floated in a 2017 initial public offering, has since seen its share price fall significantly as it continues to post losses.
There has been speculation about when Gousto may go for its own IPO, and it had previously been reported to have retained the services of financial adviser Rothschild for a potential listing, but the new capital injection means it will not be imminent, sources told Sky.
Consumer goods conglomerate Unilever is an existing investor in Gousto, having backed it across multiple rounds through its corporate venturing unit Unilever Ventures, beginning with a $8.3m series A round in late 2014 that also featured venture capital firm MMC Ventures.
Unilever later came back for a $13.5m series B round a year later – investing alongside BGF Ventures, MMC Ventures, Angel Co-Fund and private investor Andi Peters – and again in 2016 through a $12.5m round that included financial services firm Barclays, MMC Ventures, BGF Ventures and Angel Co-Fund.
Unilever took part in a $22.9m funding round for Gousto in early 2019 that included Hargreave Hale, MMC Ventures, BGF Ventures, Angel Co-Fund and Joe Wicks.
Perwyn and BGF Ventures joined MMC Ventures and Wicks to provide $41m for the company in April 2020 before adding $25m seven months later.
The meal kit market has also been fertile ground for M&A activity in recent years. Food and beverage conglomerate Nestlé bought portfoliocompany Freshly in late 2020 in a $950m deal with the potential to reach $1.5bn including earn-out payments.
Last month, keto supplement producer Prüvit agreed to merge with US-based meal kit service Sunbasket, which, like Gousto, was backed by Unilever, along with kitchenware provider Tyler Florence Group and homebuilder JF Shea, in a deal valuing the combined company at $1.3bn.
Ph0t0 courtesy of Gousto.
