As people move into months of sheltering in place, many are doubling down on cooking at home. But not everyone is always happy about it. Today, a company that makes products that can help them bypass at least some of that effort but still eat nutritiously is announcing a fundraising to continue growing its business.
YFood, a Munich-based startup that creates and sells complete-nutrition drinks, drink powders and snack bars, has raised €15 million (around $16 million), money that it plans to use to continue investing in product development and more innovative distribution of its food.
The investment is being led by Felix Capital, the London firm that has been investing big in direct-to-consumer startups as part of a bigger e-commerce push. Strategically, New Zealand-based global dairy co-operative Fonterra is also participating in this round, along with previous investors Five Seasons Ventures and New Ground Ventures.
The company is not disclosing its valuation but we understand that it’s in the region of $100 million and — as has been the case for other startups — was flat on its last round (a seed round), due to the effect of COVID-19. Notably, much of its previous fundraising — €5 million before now — is still in the bank because the startup is already profitable, having grown revenues by more than 300% in the last year.
Based out of Munich, Germany, and strongest in the DACH region of Germany, Austria and Switzerland, YFood has started to expand to more European countries and is investing in boosting its online presence, which already has some 200,000 customers; and to grow relationships with retail partners that can help with delivery.
While focusing on distribution is key for any D2C e-commerce startup at all times, it’s especially key at the moment, as a result of how much business-as-usual has been disrupted — and not “disrupted” in a good way, even though that has been something regularly celebrated in the tech world.
Prior to the coronavirus pandemic, YFood had been selling through 13,000 retailers, and also had a business of selling its products via vending machines as well (another retail channel that I imagine will be hard-hit by the current public health crisis).
But just as a would-be competitor like Soylent was borne out of the founder’s own need for fast nutrition at a time when he was working hard in the tech industry and didn’t love to cook and eat, those vending machines were actually the fillip for starting YFood, co-founders Ben Kremer and Noël Bollmann told me in an interview this week.
The two had been working in investment banking, and working late hours, they found that there were precious few options for them when they got hungry and needed sustenance fast.
“We had a problem we were solving for ourselves,” Bollmann said. “All there was were candy machines and the choice was Snickers or crisps. We couldn’t understand why fast eating always had to be unhealthy. That was the inspiration.”
The company’s next steps are likely to involve creating a wider range of products that bring in more savoury options for getting their complete nutrition — since not everyone has a sweet tooth or wants a candy bar or milkshake replacement. And much further down the line, it’s potentially going to consider how to better make itself accessible and used to populations who would be unlikely to ever consider having meals-in-a-drink but might love the idea of adding something to what they’re already eating to give it a nutrition boost, not unlike a vitamin supplement.
“We have never tried to attack the social aspect of cooking,” said Kremer. “Our products shouldn’t replace good meals. This is about tackling unhealthy eating habits, and providing solutions that are affordable to meet the demands of that product category.”
Like many other startups and food businesses, YFood has been stepping up its own efforts to provide supplies to frontline workers. In its case it has so far donated €100,000 worth of ready-to-drink meals to medical staff currently very short on time to shop, cook and eat.