Nestlé USA just announced that it has acquired Freshly for $1.5 billion — $950 million plus potential earnouts of up to $550 million based on future growth.
Freshly is a New York City-based startup that offers healthy meals that can be prepared in a few minutes via microwave or oven, delivered to your home in weekly orders. So you get the benefit of fresh, healthy meals but — unlike the offerings from meal kit startups — you don’t have to spend a lot of time cooking them yourself.
If anything, this sounds even more appealing now, as so many of us are stuck at home, preparing most of our meals for ourselves. According to Nestlé’s press release, Freshly is now shipping more than 1 million meals per week across 48 states, with forecasted sales of $430 million for 2020.
The startup raised a total of $107 million from investors including Highland Capital Partners, White Star Capital, Insight Venture Partners and Nestlé itself, which led the Series C in 2017. Today’s announcement describes the earlier investment as giving the food and beverage giant a 16% stake in Freshly and serving as “a strategic move to evaluate and test the burgeoning market.”
“Consumers are embracing ecommerce and eating at home like never before,” said Nestlé USA Chairman and CEO Steve Presley in a statement. “It’s 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 capitalize on the new realities in the U.S. food market and further positions Nestlé to win in the future.”
In a note to customers, Freshly co-founder and CEO Michael Wystrach said that the company’s offerings won’t change dramatically, although it will triple the number of menu items offered each week. He continued:
I can assure you that your meals, pricing, and subscription will remain just as you know them. Freshly will continue to operate as a standalone business to accomplish our core mission to remove the barriers to healthy eating with convenient, nutritious and delicious meal solutions, backed by the power of Nestlé to open new doors for a fresher, faster food delivery to your door. We will continue to maintain our own strict standards and maintain complete control of our products. Our meals will not be changing, and there are no plans to change ingredients or integrate Nestlé products into Freshly meals, but we are excited about potential opportunities for the future.
