Sun Basket announced $15 million in Series B financing led by Accolade Partners. The round also includes new investors Founders Circle and Shea Ventures as well as existing investors Paul Allen's Vulcan Capital, PivotNorth Capital, Relevance Capital, Filter14, Baseline Ventures and other undisclosed investors. In total, the company has raised more than $28 million.
Founded in 2014, the San Francisco company is part of the crowded meal-kit space that by Packaged Facts estimates has more than 150 players in the U.S. For its part, Sun Basket has honed in on the nearly $36 billion organic food market with its healthy meal-kits that also cater to special dietary needs like paleo and gluten-free. With more than half of consumers reporting they would prefer organic food if given the opportunity, Sun Basket believes there is a business to be had in making organic products more accessible.
"We started this [Sun Basket] focusing on meal-kits and how we provide an easier more delicious solution," said Adam Zbar, founder and CEO, Sun Basket. "What we have realized is that we have a built a pretty radical solution in terms of how to create a better more efficient way to bring organic food to people in the U.S."
Food delivery was one of the most hyped spaces in 2015 with venture capital reaching a record high of $1.5 billion in the fourth quarter, according to CB Insights. But as overall deal flow slowed in 2016, investments for food delivery also dried up, and the sector raised just $159.6 million in the first quarter. The slowdown also came at a time as many (including this writer) questioned the viability of the business model.
But Zbar believes that unlike other areas in food delivery, businesses like Sun Basket are on solid ground. "The meal-kit space is fundamentally healthier than the on-demand delivery space," he said. "We are scaling both as an industry and individually much faster."
Sun Basket's latest round of financing comes just two months after the company announced its Series A. Zbar described the company's Series B as oversubscribed, and said it sought more funding so closely to its last round because of the board's desire to accelerate growth.
At present, the company serves 34 states via its East and West Coast distribution centers. With this latest infusion of cash, the company will open a third facility in the coming months, which will allow it to serve 98 percent of the U.S. "We have been growing tremendously fast, and we will be 10 times our annual run rate from where we started last year to this year," said Zbar.
The company is also using the funding to deepen its executive bench. Today, the company announced it added 25-year Silicon Valley veteran, Drew Hamer, as CFO. Previously, he helped take Excite@Home public and was the CFO for the publicly traded company, Keynote Systems.