Nestlé USA acquires Freshly for up to $1.5 billion
Nestle USA just announced that it's acquired Freshly for $1.5 billion-$950 million, with potential earnouts up to USD 550 million contingent on the successful growth of the business. The transaction was signed on October 30, 2020.
Founded in 2015, Freshly is a new york City-based startup that provides healthy meals delivered to your range in weekly orders, which can then be prepared during a jiffy in your microwave or oven. So you get the advantage of fresh, healthy meals but — unlike signing up with a meal kit startup — you don’t need to spend heaps of your time cooking them yourself.
If anything, this sounds even more appealing now, as numerous folks are spending most of our time at home, doing our greatest to cook for ourselves. According to Nestlé’s handout, Freshly is now shipping quite 1 million meals per week across 48 states, with forecasted sales of $430 million for 2020.
This move brings together Nestlé's deep understanding of what and the way people eat at home, and world-class research and development capabilities with Freshly's highly specialized consumer analytics platform and distribution network to fuel growth opportunities within the Freshly business and across Nestlé's portfolio.
The startup raised an entire of $107 million from investors, including Highland Capital Partners, White Star Capital, Insight Venture Partners, and Nestlé itself, which led the Series C in 2017. Today’s announcement describes the sooner investment as giving the food and beverage giant a 16% stake in Freshly and serving as “a strategic move to guage and test the burgeoning market.”
"We are excited to welcome Freshly to the Nestlé family," said Nestlé USA Chairman and CEO, Steve Presley. “Consumers are embracing eCommerce and eating at home like never before,” said Nestlé USA Chairman and CEO Steve Presley during a press release. “It’s an evolution brought on by the pandemic but seizing for the long term. Freshly is an innovative, fast-growing, food-tech startup, and adding them to the portfolio accelerates our ability to maximize the new realities within the U.S. food market and further positions Nestlé to win within the future.”
In a note to customers, Freshly co-founder and CEO Michael Wystrach said that as a result of the acquisition, his team has plans to triple the number of menu items offered each week. Beyond that, however, he suggested that things won’t change too dramatically:
"At Nestlé we know the at-home food market and we know how to win there. With the acquisition of Freshly, we are strengthening our position in the U.S. and expanding our ability to deliver a wide variety of delicious food to our consumers when and where they want. Whether purchasing our products from the comfort of their homes, in retail stores or through social commerce, we'll continue to provide them with unbeatable convenience, choice, and ease of purchase." Laurent Freixe, Nestlé CEO Zone Americas added.
