When they were young

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When HelloFresh was young: the early years

Like Delivery Hero, HelloFresh launched out of Rocket Internet's startup incubator in Berlin

Innovation series by Ronny Kerr
August 5, 2016 | Comments
Short URL: http://vator.tv/n/46ae

As our readers know, Vator has started a series called When they were young.

It's a look back at the modest days of startups, what traction they had in their first few years, and how they evolved. In the end, we hope to provide a glimpse into what great startups looked like in their first three years.

Stories like these are always well received because it reminds us that anyone, regardless of pedigree and environment, can rise above the noise and have great influence. They show us the value of being resilient, persistent, and committed. If we can follow their footsteps, maybe we too can have similar success.

My last segment in this series focused on Delivery Hero. This segment is on HelloFresh.

— HelloFresh's First Year —

Founded: November 2011

Founders (ages at the time): Dominik Richter (26), Thomas Griesel (25), and Jessica Nilsson (27).

I was able to confirm with HelloFresh that these were the company's global founders. Hamish Shephard, who helped the company with marketing in the U.S. in its earlier years, is inaccurately cited as a founder by a 2014 article in the New York Times.

Initial company description: "Hello Fresh is a new way to cook. Every week we'll send you amazing recipes and all the ingredients you need to prepare them. We take care of your meal planning and even do the shopping for you. It's a revolution in your kitchen!

"With Hello Fresh you save time, discover amazing food and provide a healthy diet to the people you love most. Say goodbye to fast food and ready meals heated up at the end of a busy day. Say hello to delicious home-cooked meals using fresh ingredients.

"Our recipes are created by world-class chefs who ensure that your meals are delicious and easy to prepare within 30 minutes. You don’t need fancy kitchen equipment and our beautiful step-by-step photo instructions will change the way you think about cooking!"

Launch - at one month: Just 40 days after the initial kickoff meeting, HelloFresh had launched and started to expand.

Traction - at three months from founding, two months from launch: In March 2012, HelloFresh CEO Dominik Richter told Gigaom that the company was already active in seven German cities and five countries, including Australia, France, the Netherlands, and the UK.

Popular press coverage and first business model - at four months: In April 2012, Esquire covered HelloFresh as a "bright idea," thanks to its "weekly consignment of high-quality ingredients (and recipes), which make cooking your own dinner a relaxing, stress-free and idiot-proof experience."

Additionally, the publication reports on the company's business model. HelloFresh charges customers a subscription price, starting at £39 per week for its 3-meal plan (designed for 2 people). There is no required duration for the subscription, meaning the weekly service can be canceled with as quickly as four days' notice.

Promotional video - at six months: In June 2012, HelloFresh in Australia uploads a video to YouTube to explain "how it works." Watch below.

— HelloFresh's Second Year —

Second funding and traction - at one year and one month from founding, one year from launch: In December 2012, HelloFresh closed a $10 million round of funding from Vorwerk Ventures with participation from existing backers, including Rocket Internet, Holtzbrinck Ventures, and Kinnevik. (The first round likely went unannounced because HelloFresh was incubated and launched within Rocket Internet.)

At this point, the company says it has more than 100 employees across its Berlin headquarters and international offices. In Germany, HelloFresh says it recently delivered its one millionth meal. And the service is now live in the U.S.

Partnership - at one year and four months: In March 2013, HelloFresh kicked off a new partnership with New York-based Noom, a weight loss coaching app to offer meals with specific nutritional values. The partnership would start in the U.S. before expanding to HelloFresh's international locations.

Third funding and pricing update - at one year and ten months: In September 2013, HelloFresh raised $7.5 million in a new funding round led by Phenomen Ventures. At the time, the company says it had shipped several million meals internationally, quadrupled revenues, and doubled margins since January 2012, though it doesn't provide specific figures.

Additionally, the company's pricing model has changed slightly, with customers paying $9.94 per meal (or $8.94 if going vegetarian). For competitive comparison, Blue Apron is charging $10 per meal and Plated charges $12 for members and $15 for non-members

— HelloFresh's Third Year —

Fourth funding and pricing update - at two years and seven months: In June 2014, HelloFresh closed $50 million in Series D funding led by Insight Venture Partners with participation from Phenomen VC. At the time, the company said it had 120 employees and was delivering one million meals per month, with the "vast majority" of these going to repeat customers. Additionally, the company was active in six countries and reached 75 percent of the U.S.

Interestingly, the tables have turned, with reports that the HelloFresh's meal boxes cost subscribers between $9 and $11 per person, a bit more than a subscriber would pay Blue Apron and Plated. Co-founder Hamish Shephard told TechCrunch the higher cost is for sourcing fresh, organic, local food.

Traction - at two years and ten months from founding, two years and nine months from launch: In September 2014, HelloFresh was finally providing service to the entire U.S.

— HelloFresh Today —

Since turning three years old, HelloFresh has gone on to raise an additional $211 million in funding across two rounds, one led by Rocket Internet and the other by Baillie Gifford. Today, the company is valued at $2.9 billion, easily making it one of the most highly valued private companies in the world in the foodtech and ecommerce sector.

Homepage screenshots courtesy of Internet Archive's Wayback Machine.


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