NatureBox unwraps a $2M seed round for healthy snack delivery

By Michael Carney , written on December 11, 2012

From The News Desk

Anyone who’s ever tried to “eat healthy” knows it’s harder than it should be. Cravings and self control aside, our environment is just not setup to support conscious dietary decisions. There’s a reason we’re in an obesity epidemic and it has little to do with genetics. Natural, healthy food can be maddeningly difficult to come by, especially the kind that’s convenient and portable. This is exactly why healthy snack subscription startup NatureBox can’t be written off as just another box of the month club. And it’s why the one year old company was able to raise a $2 million seed round co-led by General Catalyst Partners and Redpoint Ventures.

Since launching in January, NatureBox has maintained a 50 to 100 percent per month growth rate in subscribers and now tops 250,000 monthly unique visitors to its site. These loyal visitors return for new healthy snack products introduced each month. NatureBox isn’t an aggregator of third-party products, but is a fully vertically integrated company that designs and manufactures its own proprietary snack products that – at least at present – aren’t available in retail stores. The company is pursuing the “Trader Joe’s model,” in which it cuts out the middleman to deliver proprietary niche products, with a reputation for quality and value, while maintaining healthy margins.

NatureBox is more than just a savvy business move. It’s a personal passion project by co-founder Gautam Gupta, who spent most of his early life struggling with obesity.

Weighing in at over 210 pounds by age 12, and facing all the physical and social consequences of that reality, he managed to lose 70 pounds through healthier eating by the time he was 19. While in college in Boston, he earned a venture capital internship at General Catalyst Partners and continued to work there after graduating, as the first representative in the company’s Bay Area office. Along the way, Gupta became well versed in ecommerce and saw an opportunity to marry this knowledge with the healthy lifestyle learnings from his personal life.

“We focused on snacks because today’s children and adults are snacking three times more than they did just 30 years ago and consuming a third of their daily calories from snacks,” says Gupta. “Snacking is what caused my obesity, and I know my struggles could have been prevented if I had had easier access to healthier choices.”

Each NatureBox includes 15 to 20 servings of four to six items. A company nutritionist curates each set based upon a seasonal health and wellness theme and sourced from local Bay Area growers and independent food suppliers across the US. October’s ‘Antioxidant Trifecta,' for example, contained dark-skinned berries, raw nuts, and dark chocolate. Many NatureBox ingredients are certified organic, despite the designation's dubious merit, and every snack under the NatureBox brand is free from high fructose corn syrup, hydrogenated oils, trans fats and artificial sweeteners, flavors, and colors.

Although announced for the first time today, NatureBox closed its funding round in late-summer and has already begun using the capital to grow its product catalog to more than 60 different SKUs, as well as grow its team from four to now 12 employees. Additionally, the company recently established its own fulfillment warehouse. Long term, the startup plans to offer a traditional ecommerce marketplace around its products, as well as replenishment subscriptions around customers’ favorite items.

Gupta incubated and bootstrapped the company with his co-founder and college friend Ken Chen. Chen was the online marketing yin to Gupta’s ecommerce business yang, and the pair were able to generate “significant revenue,” in Gupta’s words prior to seeking outside funding from his former employer, among other investors.

Affinity markets are a powerful force for businesses to tap into, and the health and wellness community is one of the most rabid among them. With limited appealing snack options, NatureBox’s customers are likely to be more loyal than those of many other companies in the “box of the month” sector. It’s early in the game, and the company will have to continue delivering new and satisfying snack options going forward, but this concept is built on a sturdy foundation.