Kitchfix joins the food-delivery bandwagon, raising $450k

Chicago-based startup lands financing to open up a retail store. Believe it or not, that's unique!

If there's one space that's super crowded, it's the food-delivery business, with every company from Group, which just bought OrderUp, to Uber (with UberEats) to dozens of newly-minted startups vying to be your preferred food-icon on your phone.

So when one startup raises money to open up a retail store, it's relatively unique.

Chicago-based Kitchfix, which has a healthy food-delivery business in Chicago already by delivering 500 meals a week, just raised a seed round of $450,000 to open up a 1,450-square-foot facility in Chicago. The store will feature items that aren't a day-old, but delivered fresh each morning from Kitchfix's main kitchen. At a time when countless of startups are raising money - Munchery, Sprig, Blue Apron, Door Dash, etc. (CB Insights has an awesome report here) - to be an online-delivery food service, it's a surprise that Kitchfix doesn't take it's working model and expand to other cities.

"We love Chicago," said Josh Katt, founder and CEO of Kitchfix, who started Kitchfix in 2013 after he couldn't keep up with his growing client base. He was cooking for about three to four families per week, prior to Kitchfix, he said. Eventually, he opened up a commercial kitchen and was cooking for 150 people each week. 

Clearly, he's cooking up something tasty. And based on the website, with words such as "nutrition", "healthy" and "chef-crafted", it's clearly food for the fine-fettle, gourmet crowd. But serving up "health", "chef-made" food isn't exactly a differentiator.  

Sprig is all about "healthy and organic" delivered in 15 minutes. Munchery is chef-made and fresh ingredients. HelloFresh is about healthy recipes (though they deliver ingredients, so it's only for those who like the idea of cooking, but hate the prep).

So how does one stand out?

"The word healthy is thrown around a bit," said Katt. "But we really have super standards. We’re working with local farms to get all our local meats. And the ingredients and even the ratio of vegetables to grains is high. We’re trying to provide a lot of nutrition in every meal vs fluffing things with extra gains. We are a premium product and pay top-dollar for our ingredients."

Given the high standards, the meals are also a bit pricier than Sprig and Munchery. Meals range from $12 to $18. Then there's delivery of anywhere from $1 to $12, depending on location. You can forego delivery charges if you pick up at some of Kitchfix's hubs. In 2016, the young startup plans to expand into other cities.

But for now, given the crowded space, it's a solid way to build up a great brand.