On-Demand Food Delivery Service Sprig Has Raised $45 Million

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Sprig, a food delivery service that specializes in healthy on-demand meals in San Francisco, has raised $45 million in a funding round led by Social+Capital and Greylock Partners.

The company plans to expand to the remainder of the Bay Area and Chicago in the coming months, and then more cities by the end of 2015. Sprig’s menu is limited, but is supposed to arrive no later than 20 minutes after someone places an order, and usually costs around $10. Sprig prepares all the food in its own kitchen run by several high-profile chefs.

Many on-demand services, such as Sprig, have seen intense interest in recent months from the venture capital community. Shyp is raising $50 million at a valuation greater than $250 million. Postmates is expected to raise a large funding round. And Instacart, an app that lets users order groceries and delivers them, raised $210 million in December.

For the most part, on-demand delivery is still a new industry where many startups are experimenting with business models. So it would make sense for venture capitalists to make multiple bets until the most successful model emerges. Even Uber is experimenting with on-demand food delivery.

“It wasn’t possible to do what Sprig was doing 5 to 10 years ago,” Sprig CEO Gagan Biyani said. “If you look at companies like Dominoes, what they were doing was a logistical nightmare. Today we can orchestrate that much more beautifully with the technology and data science we use to route drivers more efficiently.”

But the company is not the only one focusing on food delivering that’s attracting interest. SpoonRocket last year also raised $10 million, and DoorDash reportedly raised $35 million earlier this year.

To its credit, Sprig began expanding its delivery service to the southern San Francisco Bay Area earlier this year.

“[Expanding to new cities is] how a lot of on-demand services show successful growth,” Biyani said.

“With Sprig, we’ve shown we can grow to a large amount even within one market. If you look at the most successful companies, they’re growing within their existing markets and adding. New customers are still finding sprig today in San Francisco.”

For now, Biyani says the company’s biggest focus will be finding and adding new team members in San Francisco and Chicago. Sprig raised $10 million in financing in a round led by Greylock Partners last year. The company launched in November of 2013.