Nestlé acquired one of its portfolio companies, US-based meal kit provider Freshly, on Friday in a deal that valued it at $950m and which could hit $1.5bn with earnout payments included.
Freshly runs a subscription service that delivers healthy meals to consumers that can be heated up in just three minutes. It is now shipping more than 1 million meals a week across the United States and has forecasted sales of $430m for 2020.
The deal comes after approximately $107m in funding for the company since it was founded in 2015. Nestlé subsidiary Nestlé USA led its last round, a $77m series C round in 2017 that included Highland Capital Partners, Insight Partners and White Star Capital.
The three other investors had provided $21m in series B funding for Freshly the year before, its earlier cash coming from backers including Highland Capital, White Star Capital, BrandProject and Jason Finger.
Steve Presley, chairman and chief executive of Nestlé USA, said: “We are excited to welcome Freshly to the Nestlé family. Consumers are embracing e-commerce and eating at home like never before.
“It is an evolution brought on by the pandemic but taking hold for the long term. Freshly is an innovative, fast-growing, food-tech startup, and adding them to the portfolio accelerates our ability to capitalise on the new realities in the US food market and further positions Nestlé to win in the future.”
Meal kit subscriptions in general have experienced an upsurge in interest during the coronavirus pandemic. The Nestlé acquisition follows reports last month that Freshly was considering launching an initial public offering in 2021.
Image courtesy of Freshly Inc.
