Blue Apron, a service that delivers all the ingredients you need to cook a beautiful, healthy meal, has today closed a $5 million Series B round of funding led by Bessemer Venture Partners, with participation by First Round and others.
With the funding, Blue Apron plans to expand to the West Coast, offering service to ten new states such as California, Oregon, Washington, Idaho, Nevada, and various select markets in Utah, Arizona, Colorado, Wyoming and New Mexico.
According to the press release, the expansion will allow Blue Apron to offer service to 80 percent of the nation, which is pretty impressive considering the company was founded in New York just a year ago. And momentum has been great. The company now delivers over 100,000 meals per month.
I asked Matt Salzberg, CEO and co-founder, how he felt about up-and-coming competition from similar services. After all, Plated just launched out of TechStars in New York with a similar model, while HealthyOut (a service that offers healthy pre-planned restaurant delivery) launched in May on our Disrupt NY stage.
“As the market-leader, our biggest competition is the status quo: consumers who still get their food from grocery stores or as take-out,” said Salzberg. “Blue Apron is simply a better way to eat. The market is absolutely gigantic, and our focus is on continuing to deliver the best recipes, and freshest food at lower-than-grocery store prices.”
According to Salzberg, the company makes “a healthy margin” on each meal delivered, with the price sitting at $9.99 per person, per meal. He says this is possible because, in hiring, the team recruited a special group of “food sourcing experts” who combine choosing high quality foods and produce for customers with massive purchasing power. Remember, 100,000 meals per month.
We reviewed Blue Apron not that long ago, and found it to be an educational, fun, and convenient experience. However, while $9.99 may offer a healthy margin to Blue Apron, it’s almost impossible to use the service as a money-saver unless you eat dinner only or you eat out almost exclusively.
The new $5 million round is an addition to a $3 million Series A, bringing the company’s total funding to $8 million.