San Francisco-based food delivery startup, Munchery, is closing on an $85 million round of fundraising, led by SherpaVentures and Menlo Ventures. This closing will place a valuation of $300 million on the company.
Munchery is one of many startups in the crowded ready-made meal space. Last month, Sprig, another ready-made meal delivery startup, raised $45 million, and Blue Apron, which delivers make-it-yourself gourmet food kits, is currently seeking funding at a valuation of approximately $2 billion.
Unlike its rivals however, Munchery delivers meals that are cold and in need of heating before eating. This allows for the company to deliver a larger number of meals over a wider geographical area without fear of spoilage. As the business model of app-based, online, food delivery matures, and venture capitalists consider committing larger investments, these companies are coming under more intense scrutiny. One other business aspect that sets Munchery aside from its rivals is that unlike other food delivery companies that turn to independent contractors for their labor, Munchery employs a staff of full-time drivers with benefits. This might increase Munchery’s costs, but could likely help the company gain a more loyal staff and customer base, making it appear more sustainable than its rivals.
Munchery is currently operating in New York, San Francisco, Seattle, and Los Angeles, pricing its entrees between $9 and $14 each, with a delivery charge of $3 per order of any size. Prior to this round of fundraising, the company had raised $30 million.
This investment is the single largest investment made by SherpaVentures.
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