Direct-to-consumer meal delivery service Territory Foods closed on $22 million in Series B funding to expand into new cities.
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The Arlington, Virginia-based company was founded in 2011 by Jeff Kelley, Josh Kriger, Patrick Smith and Robert Morton, and specializes in fresh meals that are chef-crafted and personalized for dietary preferences. Ellis S McCue was named CEO in 2019 after joining the company in 2017.
“Territory Foods was very much born around the fitness food movement toward Paleo and CrossFit,” McCue told Crunchbase News. “Patrick Smith was going through a health change, but didn’t know what to cook. He went on Craigslist and found a Paleo chef, but wasn’t just going to make food for just him, so he found others who wanted the service.”
U.S. Venture Partners led the round and was joined by Upfront Ventures, Lewis & Clark Ventures, DF Enterprises, S2G Ventures, Gaingels, Middleland Capital, Motley Fool Ventures, Finistere Ventures and Rethink Food Capital, as well as Abby Wambach and Vernon Davis. The new funding gives the company a total of $44 million, according to McCue.
Rather than having its own kitchen like other meal delivery services, Territory works with a network of restaurant and independent chefs and has expanded it to the West Coast.
Its technology-enabled, decentralized back-end marketplace enables consumers to support their local culinary small businesses. The company touts incorporating chefs from businesses that are 42 percent women-owned and 38 percent being Latinx, Black, Indigenous and people of color, McCue said.
The Series B will enable Territory to expand into new cities and do what it does at scale, as well as invest in technology and food as medicine projects. The company already operates from Miami to Maine, west to Chicago, Texas and Los Angeles, but Territory intends to be fully national by the end of the year, McCue said.
“We foundationally believe food should be delicious, so we are building a depth of assortment, more cuisine, more chefs, and will go into new trends,” she added. “We also collect more than 90,000 points of data per week and will use that to provide better recommendations based on health preferences, protein and culinary style.”
The global meal kit delivery services market size was valued at $7.60 billion in 2019 and is expected to grow at a compound annual growth rate of 12.8 percent through 2027, according to Grand View Research. At the same time, the global online food delivery segment was projected to reach $28.5 billion in 2021, according to Statista.
The shift in buying habits propelled the market from 2 percent to 4 percent for food delivery and meal kits from 10 percent to 14 percent, and it is still holding there, McCue said. Last year was a big year for the company itself, growing at 250 percent year over year and increasing customers by more than 50 percent. In addition, customers went from just using Territory Foods for five lunches per week to lunches and dinners and feeding their families on the weekend, she added. As a result, the company launched four new business lines.
“We plan to make a bigger footprint, tell more chef stories and bring on more chefs,” McCue said. “We are also looking to where the customer is going, and what she wants from us next, such as a dietician or support to try a new diet. We want to be more than just food, so 2021 will be about building bigger relationships and breaking out of the four walls of the meal box.”
What investors have to say
Meanwhile, Kara Nortman, managing partner at Upfront Ventures, said the firm invests in consumer, marketplace, enterprise software and agriculture companies. As consumer behaviors are shifting, she said, the investment in Territory made sense.
“I met Territory during a time when centralized business models were getting funded, and Territory had a very specific type of consumer and platform,” Nortman said. “Territory has a unique approach to producing food, supporting local chefs and is positioned to distribute meals in a way the end user wants it.”
Feature photo courtesy of Territory Foods.
Blogroll illustration: Li-Anne Dias
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