America’s fast-growing meal kit service just raised millions in funding
San Francisco-based Sun Basket delivers organic meat and veg recipe boxes and claimed its latest round of funding, led by August Capital, would help the four-year-old business generate over US$1 billion in revenue.
The company grew faster than Airbnb, Uber and Zappos between 2014 and 2016, while its net revenue last year increased by more than 280%, hitting US$250m in Q1 2018.
‘Excited’ about growth potential
“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.”
Tripp Jones, general partner at August Capital, added: "[I am] excited to work with Adam Zbar and the rest of the Sun Basket team to prove, once again, that conventional wisdom can be wrong.”
US media companies, including our sister title Food Navigator, Bloomberg and Fast Company reported that meal-kit businesses intrigued investors by their use of technology and ability to build direct relationships with consumers. But of late, investors have become bearish after the industry took a wobble when Blue Apron’s stock plunged, disappointing investors after a much-hyped initial public offering.
However, Sun Basket is giving investors something to cheer about in the sector.
The business uses customer data to create personalised food boxes and can reach 98% of continental US homes via three distribution centres. The business has up to three times the customer retention rate of major competitions, according to a third-party analytics platform. And it is building two new automated facilities thanks to the US$57.8m round of funding. All of this has given investors something to feel bullish about.
Jones, of August Capital, believes the mix of ingredients gives Sun Basket “the power to disrupt the US$650bn grocery market”.
