Hungry Marketplace, a startup that connects independent chefs to corporations that need catering, raised $20 million in a new round of funding.
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Investors in the round, which was led by Evolution VC Partners and former Whole Foods co-CEO Walter Robb, include actor Kevin Hart, rapper Jay-Z and several NFL players. The new round brings Hungry’s total funding to $32.6 million, according to Crunchbase.
Hungry previously raised its $8 million Series A in April 2019, a round that was led by Motley Fool Ventures and Sands Capital Ventures, according to Crunchbase. Marcy Venture Partners (the VC firm co-founded by Jay-Z, Jay Brown and Larry Marcus) and singer Usher also participated in the round.
Usher’s mother owns a commercial kitchen in Atlanta and told her son about Hungry, company co-founder and COO Eman Pahlavani said in an interview with Crunchbase News. Usher then ended up investing in the Hungry’s Series A round.
Many chefs who are starting out or don’t have their own restaurants rent space in independent commercial kitchens. Hungry, which is based in the Washington, D.C., area, is a marketplace that connects those chefs to companies that need catering by handling all of the logistics and letting the chefs do what they do best: cook.
“The idea is chefs don’t like to do delivery, they don’t like to leave the kitchen and deliver food,” Pahlavani said. “Hungry takes care of the delivery, the customer acquisition costs.”
It’s a capital-efficient business model for Hungry because the company doesn’t own or operate the kitchens, Pahlavani said. The chefs are independent contractors, as are the “catering captains”–a fleet that delivers the food, sets it up at a company’s location and stays on site so the company doesn’t have to handle anything. Hungry brought on an employee who formerly worked in hospitality at Hilton to train the catering captains so the business could excel on the service side.
Hungry has rolled out its services in six cities so far, with Austin as the latest addition and the first market that isn’t on the East Coast. Dallas is up next, and Hungry plans on being in 23 markets by the end of 2021.
“We’re just rinse and repeating what we’ve done in the past five markets, we’re just doing it faster and that’s what this funding is helping us do,” Pahlavani said.
Hungry serves more than 500 companies across the country and its revenue has grown more than 300 percent year over year, Pahlavani said. The company got to a $20 million run rate last year, and expects to hit a $50 million run rate by the end of this year.
As for valuation, the company is past $100 million with this round, Pahlavani said, and it thinks it can reach unicorn status in the next few years.
Hungry has had more than 1,000 chefs apply to be on the platform, but the company only picks the “cream of the crop,” Pahlavani said. Each chef goes through a vetting process that includes a local tasting for Hungry’s office where employees rate the meals and then help coach chefs with menus and approve the final foods. Hungry now has more than 200 chefs on the platform.
Chefs’ gross revenue has ranged between $20,000 and $50,000 per month, Pahlavani said, and chefs typically take home more than 50 percent of that. Hungry tries to raise chefs’ profiles by featuring their photo and biography with signage at every event they cater.
“Where the chefs need help is on the business side,” Pahlavani said. “How do you bring on a customer … Hungry is that side of the business. We’re a business in a box for them.”
Illustration Credit: Li-Anne Dias
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