First-generation Americans Alvin Salehi and Joey Grassia tapped into their home-cooked meal backgrounds to create Shef. Now the company has raised $20 million in Series A funding to continue developing its platform that provides an outlet for local cooks to sell authentic, homemade dishes to their neighbors.
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Andreessen Horowitz led the Series A round with participation from Craft Ventures, M13 and Y Combinator, as well as a group of celebrity investors that includes Padma Lakshmi, Tiffany Haddish, Katy Perry, Orlando Bloom, chef Aarón Sánchez and NBA player Andre Iguodala. In total, Shef raised $28.8 million, including an $8.8 million seed round last August.
Salehi’s parents immigrated from Iran and Grassia’s from Sicily. They met when both were named to the Forbes 30 Under 30 and bonded over their experiences in policy and food, and how it could help newcomers to the United States make a meaningful income selling homemade food.
San Francisco-based Shef, named as an homage to women, was founded in 2018 and launched in January in 2019 after California passed its home cooking bill, Grassia told Crunchbase.
Appealing to people’s memories of food from their home country has inspired similar startups: Oren Saar and Merav Kalish Rozengarten, two Israelis living in New York, started WoodSpoon in 2019 to offer on-demand, crafted foods made by home chefs and delivered to the diner. WoodSpoon announced $2 million in seed funding in December 2020, led by World Trade Ventures.
Although Shef was initially hindered by state regulations regarding the sale of home-cooked food, however, 44 new bills related to home cooking were introduced in 29 states across the U.S. last year, paving the way for more markets, according to the company. Shef now operates in seven markets, including San Francisco, New York, Seattle, Chicago, Houston, Boston and Austin, and is launching in new markets every few weeks, Grassia said.
The global pandemic changed everything overnight, Salehi said. It caused the company to rethink its strategy. Recognizing that the pandemic disproportionately affected people of color, Shef now touts 85 percent of people of color as chefs on the platform.
“Our waitlist swelled to 8,000 and now it is over 12,000,” he added. “It was heartbreaking and reminded us how deeply people were struggling and needed a lifeline to get back on their feet. Our mission is to help as many people as we can, even if it was just one or two markets initially. Now we can expand to more markets.”
Chefs on the platform earn an average of $40 a hour after expenses compared with an average of $13 to $15 an hour as a line cook, Salehi said. Shef collects a transaction fee — 15 percent — for each order. Delivery fees are calculated based on region, and chefs keep 100 percent of tips and other payments.
The new funding will go toward hiring, expansion into new markets, and the development of a mobile app, one of the features that had to be put on hold during the pandemic. Shef has 40 employees right now and expects to grow by the end of year based on the needs of the markets.
Shef cooks go through food-handling certification for their respective markets and receive a package containing items they need to make food safely and legally, including gloves, masks and thermometers. They learn packaging, menu formulations, pricing, safety training and food quality assessments, Grassia said.
“The process is quite involved, and the funding will enable us to expand our team and reach so we can onboard all 12,000 people on our waitlist,” he added.
As part of the investment, Jeff Jordan, general partner at Andreessen Horowitz is joining the Shef’s board.
Feature photo of Joey Grassia and Alvin Salehi with Shef community courtesy of Shef.
Illustration: Li-Anne Dias
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