Nestlé Joins $77m Funding Round For Healthy Meal Startup Freshly

ARLINGTON, United States — Nestlé USA has announced it is the lead investor in a $77 million funding round for healthy meal startup Freshly.

The move will give Nestlé access to the fast-growing online prepared meals market. Currently $10 billion in size in the US, it is a category that Nestlé expects to grow at ‘very attractive rates’.

While most food choices are still made in supermarkets, Nestlé USA’s Chairman and CEO Paul Grimwood argues that “consumers are responding to a growing universe of direct-to-consumer options, made possible through innovation.”

Freshly, which markets itself as a convenient, time-saving solution, offers its customers a weekly online service featuring a rotating menu of healthy meal options — choices include gluten-free, high protein, low carb and vegetarian options, with prices starting at £$49.99 per week for four meals.

Having only launched in 2015, the fast-growing startup has already raised $30 million from two previous funding rounds and claims to ship over 250,000 meals per month. However, its commitment to innovation within the food category is what caught Nestle’s eye. This Nestle argues, is directly aligned with its focus on finding new avenues to deliver delicious, nutritious meals to consumers as their eating habits continue to evolve.

Acquiring a position in Freshly will also allow Nestlé to “gain visibility into Freshly’s advanced analytics and its highly effective distribution network, (while) Freshly will benefit from our R&D, nutrition, and sourcing expertise,” explained Grimwood.

The sum of Nestle’s investment is yet to be disclosed, but according to the food and drink manufacturer, the capital will help to fund Freshly’s construction of a new East Coast kitchen and distribution center in 2018, as it prepares to expand to a nationwide service.

With a 60,000 sq. ft. facility in Phoenix Freshly is currently able to ship to approximately 40 percent of consumers.  Upon completion of a new facility in Savage, Maryland, Nestlé estimates that Freshly will be able to serve about 93 percent of the US population with prepared meals that can be heated in two-three minutes.

“We are extremely excited to work with and to learn from Nestlé, the largest food company in the world,” said Freshly CEO Michael Wystrach. “This investment and close partnership will allow Freshly to continue to expand and rapidly scale our reach in order to achieve our goal of being in every household in America,” he added.

And as Nestlé continues to accelerate its journey to become the world’s preeminent nutrition, health and wellness company, this type of investment is unlikely to be the last we can expect from the Swiss food group.

Sign up to receive Welltodo weekly business insights for the wellness industry.