Subscription services may be plentiful, but with few exceptions they haven't been basking in the glow of VC attention--until now.
Blue Apron, a weekly subscription service for home cooks, today reported it has raised $50 million in investment capital. New York City venture firm Stripes Group led the C-funding round, along with previous backers including First Round Capital and Bessemer Venture Partners.
All told, the New York City-based food subscription startup, which got its start just over a year ago, has raised $58 million, putting its valuation near $500 million.
"We're all very excited for this next chapter in our company's growth," says Blue Apron's CEO Matt Salzberg, who formerly worked as a venture capitalist at Bessemer.
Blue Apron, which has roughly 200 employees, dishes out about 600,000 meals a month. The company expects its "meal kits," which feed between two and six people at a cost of roughly $10 each per week, to generate approximately $70 million in sales this year.
Still, there's ample room to grow. The startup doesn't currently serve every state in the union. For instance, the Dakotas, as well as Hawaii and Alaska have presented delivery hurdles for the company.
Salzberg says he expects the company will service 100 percent of the lower 48 states before the end of this year. "We're planning to use the money to make Blue Apron a nationwide household name," he says. "We'll be expanding our fulfillment capacity, hiring additional people, and increasing our marketing budget to reach new customers."
Jack Plunkett, a retail analyst at Plunkett Research in Houston, notes that to fulfill these ambitions, Blue Apron will need to offer a greater range of options. "Anecdotally speaking, I never hear anyone talking about how they enjoy their subscription services," he says, referring to what's become known as subscription fatigue. "There are so many [companies] competing for this home-meal dollar that it's going to be a real challenge."