“I think more and more startups will take some portions of the massive billion dollar supermarket industry, and there are many ways into it,” says an upbeat-sounding Fabian Siegel, co-founder of Marley Spoon. After debuting in Germany last year, followed by the Netherlands and U.K., the Berlin-headquartered cook-at-home food subscription and delivery service sees its U.S. launch today.
That means the startup, whose backers include the Samwer brothers’ (of Rocket Internet fame) Global Founders Fund, is going up against similar and more stablished recipe kit startups who operate across the pond, including Blue Apron, Plated, and Rocket Internet’s own HelloFresh. They too offer to send you perfectly portioned fresh ingredients and the required recipe and instructions so you can get busy in the kitchen.
However, Siegel — who notably was co-CEO of online take-out ordering service Delivery Hero — maintains that the real competitor remains the weekly grocery shop.
“If you think about a supermarket, which is our competitor here, they are horizontal, meaning you can get everything. They service all purposes but they serve them kind of poorly,” he says.
“What we do is pick one use case — cooking — and we integrate it end-to-end. We do the planning, we do the thinking by coming up with new and interesting recipes every week and you can just click on what you like. We take all the shopping away from you so you don’t have to do the shopping anymore. And you don’t have to shlep it home.”
Marley Spoon’s U.S. operation is being headed up by Jennifer Aaronson, former Editorial Director of Food and Entertaining at Martha Stewart, together with Jasper Heyden, who was previously at Rocket Internet, and Monica Noh, a Parsons School of Design graduate and former fashion entrepreneur. It will initially target the East Coast corridor, keeping somewhat away from the echo chamber of Silicon Valley.
Meanwhile, Siegel tells me that the biggest challenge faced by Marley Spoon is creating awareness that such a service exists. He says that unlike other food e-commerce opportunities — referencing his time at online take-out marketplace Delivery Hero in particular — people don’t search online for a recipe kit service. Therefore traditional online marketing and SEO doesn’t always work.
Instead, the company is investing in off-line channels, such as television advertising, and piggybacking other home delivery services, including placing introductory offers in Amazon packages. “This makes the customer acquisition process tedious and slow, so you need good financing,” he says. However, “people who use the product, stick with it”.
Siegel says Marley Spoon has also learned much from its Germany, Netherlands and U.K. launches. Namely, in addition to the young couples and “empty nesters” the startup originally targeted, the service has surprisingly been resonating with families who want to put “grown up” food back on the table. This group, however, is a little more price sensitive, so Marley Spoon has in turn tweaked its model.
The company appears to have ditched the emphasis on being an “on-demand” service, where you aren’t forced into a weekly subscription, to one where prices are reduced based on the number of meals you subscribe to each week, even if you can ‘pause’ your subscription at any time. That’s because a large part of Marley Spoon’s overhead is the cost of delivery, which benefits from a little scale the more meals you can fit into a single order.
What hasn’t changed, however, is the ability to choose from 7 available recipes each week. Siegel is insistent that without offering that level of control customers run the risk of throwing food away because they haven’t bought into the corresponding dish in the first place. A failing that not all of Marley Spoon’s competitors address.
“Our technology allows users to choose what they want every week, so we’re much more flexible than Blue Apron,” he says. “But in general, Blue Apron [et al.] isn’t our competitor. The competitor is this massive old school non-tech grocery industry that is slow and wasteful. Therefore I’m very confident that we can build a business that’s just as great”.
In related news, Marley Spoon has raised an additional $3.5 million via a Series A2 round from Lakestar. This adds to the ~$5 million the startup previously raised in a Series A round led by Global Founders Capital, with participation from Point Nine Capital, and various unnamed angel investors.