Hungryroot, a startup offering personalized grocery delivery, completed a funding round that brings its valuation to about $750 million, according to a person familiar with the matter, as interest in online food shopping remains elevated during the pandemic.
The company raised $40 million in Series C financing, Hungryroot said Friday, bringing its total fundraising to $75 million. The latest round was led by L Catterton, a private-equity firm that has invested in companies including Function of Beauty and Savage X Fenty.
Hungryroot uses artificial intelligence and user questionnaires to tailor its delivery services. The company, started in 2015, combines grocery and food delivery by offering ingredients as well as suggesting recipes and providing meal plans.
Ben McKean, Hungryroot’s founder and chief executive officer, said demand for the company’s services has been particularly strong over the past year. “Every single month has been better than the last month in terms of revenue, in terms of retention, in terms of acquisition,” he said in an interview.
The company plans to use the new funds to expand from about 300 grocery items available each week to 3,000 over the next three years, McKean said. It’ll also invest in new technology to improve its algorithms.
With the current sales growth trajectory, McKean said the company would consider going public, potentially in the next 18 months.
“This year, we’ll do $175 million, next year we expect to do over $300 million and maintain our profitability,” he said. “At that point, the public market is certainly an option that we’re going to be considering.”
— With assistance by Katie Roof