When venture funding started to slow in 2022, many feared that investors would retreat to where they were comfortable: SaaS companies founded by folks in their network. And any company that wasn’t posting top growth metrics would struggle to secure funding. While this has largely been true, there have been bright spots. Everytable’s recent round is one of them.
The mission-driven food tech startup looks to make healthy prepared food, including wraps and salads, as accessible and affordable as fast-food chains. The startup prices its menu based on where each individual store is located in addition to distributing through a variety of other channels, including branded vending machines and delivery.
On June 27, the startup announced a $25 million Series C-2 round led by Dohmen Impact Investment Fund, which backs for-profit companies building food solutions to enhance human health, in addition to existing investors. This round will help the company expand its retail footprint; Everytable hopes to open up 25 stores in the latter half of 2023.
This deal is notable for a few reasons — none of which being that it got announced amid the mass VC summer exodus at the end of June. Someone is still working!
The deal shows that there is still investor appetite for startups looking to deliver more than just profits, even in a tougher market. While Everytable says it strives for all of its stores to be profitable on their own, the commitment to keeping healthy food affordable may make it harder for them to scale. Plus, the stores aren’t the only part of the business’s expenses.
But investors are still backing it. While the lead investor in this round is more impact-flavored than your average VC, the company hasn’t exclusively raised from mission-focused investors: It also raised $55 million last August — during a particularly slow summer for deals — from New York–based seed fund Lerer Hippeau, multiple corporate VCs and angels.
This round shows that the current funding environment should not discourage folks who were considering launching for-profit businesses that are rooted in social change. Funding for these types of companies has not only continued, but also the number of investors looking to back these companies is large, and it’s growing.
Everytable was backed by a handful of them. Gullspång Re:food is a Swedish org that backs founders trying to solve the food industry’s structural issues. The Libra Foundation invests in companies focused on helping communities of color flourish. Gratitude Railroad is an investor group that backs companies solving environmental and social problems.
Plus, the round’s lead investor, the Dohmen fund, just launched three months ago — with $60 million in cash — to back these exact kinds of startups. Unrelated to this deal, but this week Public Ventures, a new impact-focused investor, announced that it is targeting $100 million for its debut fund to back mission-driven startups.
Sam Polk, the founder and CEO of Everytable, agreed that there has been more capital coming into this sector. In an email to TechCrunch+, he said he’s seen significantly more investor interest in mission-driven startups in recent years compared to when he started the company seven years ago.
“While the climate has shifted from funding ‘growth at all costs’ to more sustainable growth, investors (just like consumers) continue to seek out companies that align with their values,” Polk wrote. “There is tremendous opportunity for entrepreneurs and companies who exist to solve some of the world’s most complex and persistent issues.”
All of this is to say: If you’re an impact-focused founder in line for funding, stay in line!
Impact aside, this is also interesting because it shows growth for a late-stage startup amid an otherwise gloomy environment. The company has been able to expand despite the current economic conditions and was able to triple the number of stores it had in 2022. This is a very different narrative than many of its peers that are looking to grow into lofty valuations or cut cash burn or headcount.
There also just aren’t as many late-stage deals getting done right now. According to new data from PitchBook, there were 1,930 late-stage deals in the U.S. in the first half of 2023. If current trends continue, the number of late-stage deals is not on pace to break its slump this year. Median deal size and median valuation also went down so far in 2023 compared to last year.
So, if Everytable can raise two late-stage rounds amid a funding slowdown as an impact-driven startup with no mention of AI, this is a good sign for mission-driven startups.
“The mission or impact you want to make in the world should always be your North Star, but your strategic plan should be a roadmap to sustainable growth and profitability,” Polk wrote.