This is great news for the foodtech industry, and it highlights the larger trend of consumers looking for more choices for ordering and eating. Providing further evidence of this shift is this weeks news that Zesty, a healthy meal version of Grubhub, raised $17 million in its series A round led by Index Ventures for expansion outside of San Francisco. The real trend Zesty is banking on: healthy corporate catering and lunches. Zesty doesn’t operate its own kitchens; it delivers meals from restaurants to Bay Area businesses of 10-10,000 employees. Zesty delivers based on an agreed-upon schedule, working with restaurants to ensure there’s no added sugar or MSG in meals. To meet the demands of health conscious eaters, all meals come with lists of ingredients and calories per serving.
Corporate lunches have been on my radar for a long time. Back in 2008, when my company, The Fresh Diet , was in its second year, I saw a tremendous opportunity for expanding into office delivery, and I hired an employee to research and plan for that expansion. Unfortunately, the undertaking proved harder than we expected. Because we delivered our meals during evening hours, it wasn’t easy to add office delivery, since most corporations don’t have easy access after 7PM. The hassle, and the time it added to our driver schedules, meant that in most cases we couldn’t make it work. Eventually I gave up as I did not want to lose focus on our core offering, home delivery.
As foodtech has heated up, corporate lunches and catering have been big drivers of growth. Companies like Zesty, Eat Club, ZeroCater, Chewse and CaterCow have raised millions of dollars while continuing to grow and expand their offerings. Last year Eat Club closed a $10 million dollar Series B round, bringing its total funding to $16.5 million and delivering to over 2,000 offices. I have no doubt we will hear of new rounds from them and others in this space very soon. This trend has upside for delivery companies as well as for companies like Farm Hill that prepare the meals.
Farm Hill is a fast-growing Silicon Valley startup focused on delivering healthy lunches to individuals and groups in non-urban areas like Mountain View and Palo Alto. Farm Hill is already serving thousands of customers in the Bay Area, focusing primarily on corporate customers. Office managers and employees can order directly from Farm Hill’s website, but Farm Hill also partners with companies like Zesty and ZeroCater.From left, Mark Wittman and Marc Manara, founder of Farmhill.
From left, Mark Wittman and Marc Manara, founders of Farmhill at their Redwood City kitchen. (Photo Credit: Vicki Thompson, bizjournals.com)
Farm Hill closed an initial round of funding earlier this yearthat was led by Eagle Cliff Partners, with participation from Liberty City Ventures, Stanford StartX, and other funds and angels. Since closing that round, Farm Hill has been growing rapidly. Based on that growth, the company seems primed for a larger round of funding in the near future.
arm Hill Founders Marc Manara and Mark Wittman, who met each other at Stanford’s d.school, had worked in driving sustainability and were seeking to extend that into the food market. When I reached out to them to get their reaction to the Zesty funding news, Manara and Wittman told me that the news speaks to the growth of healthy eating, and that they are eager to grow alongside companies like Zesty outside the Bay Area. They’re also interested to see how models like Zesty and ZeroCater perform outside the Bay Area, where company-provided employee meals are not as common as they are in Silicon Valley.
As I think about all that is going on in the segment, my discouragement at my own lack of progress in the space shifts to optimism. Through our recently launched Fresh Diet @ Work program, companies can partner with The Fresh Diet to offer employees a complete fresh food solution consisting of three healthy and convenient chef-made meals and two snacks, delivered directly to employees. Unlike the companies mentioned above – who only focus on lunch and only cover one geographic area – The Fresh Diet operates five kitchens around the country, delivering to 44 metropolitan areas comprising 570 cities and towns.
Marlene Rodriguez, wellness program manager with Bayview Asset Management, The Fresh Diet’s first beta corporate partner, said that while most employees want to incorporate healthy eating into their busy work schedules, many expressed that they didn’t have access to healthy foods. But now, with the launch of Fresh Diet @ Work, Bayview can offer employees a healthy, delicious, and convenient fresh eating solution that aligns with the company’s wellness goals.
The foodtech space shows no signs of slowing down. As capital continues to flow in, entrepreneurs will enjoy increased opportunities for serving consumers at home and work. The world is changing dramatically, and nowhere is this more obvious than within the food segment. As our eating habits continue to change, and as technologies for ordering food grow, the idea of picking up the phone to call for pizza delivery will become a relic of the past.