Is there such a thing as accidental stealth mode? If so, meal kit delivery company HelloFresh takes the prize. Despite being the first company in the meal kit delivery space — narrowly beating out the likes of Plated and Blue Apron — HelloFresh managed to fly completely under the radar in the US for years. I had never heard of it prior to being pitched on covering its whopping $50 million Series D. It’s almost like it had to work to ensure no one noticed it.
“Maybe the reason you haven’t heard of us yet is because we spend far more time on our customers than anything else,” says Hamish Shephard, co-founder of HelloFresh US. “All we care about is delivering amazing food to our customers.”
Today’s funding announcement, a round led by Insight Venture Partners, marks the big unveiling moment for the company, where it throws back the covers and says, “World, this is me.” With today’s announcement news, HelloFresh also expands to seven new states: Texas, North Dakota, South Dakota, Oklahoma, Minnesota, Nebraska, Louisiana. It won’t be possible to ignore HelloFresh anymore, not with one million users and a pile of venture that beats Plated and BlueApron. The question is: Is HelloFresh too late to dominate the American market?
Its competitors have made a far bigger splash here already, weaseling into the hearts, minds, and stomachs of the American public. The no-name HelloFresh is playing catch up. When asked whether he thinks the company dropped the ball on its publicity strategy in the States, Shephard defers.
“I definitely wouldn’t say that,” Shephard says.“If we had dropped the ball we would never have attracted such a fantastic investor.”
He does, however, admit that a substantial chunk of the big Series D will go towards marketing in America. “Obviously that will be a major goal for us,” Shephard says. Furthermore, HelloFresh has a distinct advantage in the international market since it got there first. It’s already in Germany, Austria, the United Kingdom, the Netherlands, and Australia.
The meal kit concept made perfect sense in Europe because in countries like the UK grocery delivery is ubiquitous. “Every single grocery store delivers,” Shephard says.
The founders of HelloFresh got the idea for the company from grocery stores themselves. In Sweden, a common way of shopping is to purchase a recipe bag at the grocery store so you don’t waste ingredients buying more than you need for a meal. For HelloFresh, it was a simple jump from that to delivering such recipe kits. With denser communities, delivering from home to home was easy.
“In the Netherlands we can get to twenty customers in two hours. In the US, not so much,” Shephard says. The company has had to learn to adapt its business model for American eccentricities. Apparently Americans are accustomed to more food choice and more multicultural options than Europeans. We also have more varied geographical preference. “Things like the difference in climate mean you can’t just give people the same recipes in Chicago and Miami,” Shephard says. “If you try to satisfy everyone you might satisfy no one.”