GoodFood about to close $20 million financing round in public markets

GoodFood, the Montreal-based meal kit delivery service, is about to close a $20 million financing round in the public markets.

The company, which currently delivers in Quebec, Ontario, and the Maritimes, will use the funding to expand across Canada. They previously raised $1.1 million in financing from Edō Capital, the $10 million food tech fund headed by Hamnet Hill. They raised follow-on funding in the summer.

GoodFood was founded in November 2014 by Jonathan Ferrari and Neil Cuggy, former employees in the investment banking department of RBC Capital. After leaving their jobs the two set up a search fund, MTL Capital, the first of its kind in Quebec. But after raising an initial $400,000 in capital and searching for a suitable target, they decided the search fund model wasn’t for them. They paid back the rest of the original capital and started GoodFood, named Culiniste at the time.

Shortly thereafter they partnered with a third co-founder, Raffi Krikorian.

“We basically started the business in the living room of my apartment in downtown Montreal,” Ferrari told MTLinTECH. “Before that I was working in finance and I loved to make my own meals. I loved to cook, but I never had enough time to think about how to plan my meals, how to get everything together, and how to have a grocery delivery option that made sense for me. So the inception moment was even before starting the business, it came out of my own personal needs and trying to think of a product that could be tailored to those needs.”

The timing could not have been better. When GoodFood started out, meal kit delivery services were still fairly small and unheard of operations. But in the past few years the concept has really gained traction, with companies like Blue Apron and HelloFresh taking off in the US. Blue Apron alone had more than $800 million in revenue last year and an estimated valuation of $3 billion.

“When we started the business [Blue Apron and HelloFresh] were very small on the global scale. So it wasn’t this obvious slam dunk that this was a real industry that was going to explode. It was ‘ok, think about your personal needs, see what’s happening globally’, and the two kind of ended up working together and creating a real industry around it.”

After raising $1.1 million from Edō Capital, GoodFood was able to build up its team. Then, they set about rebranding themselves from Culiniste to GoodFood.

“We spent about six months working on a complete rebranding project: new name, new website, completely redid all the packaging, the design of the recipe cards, everything. That’s where we came up with the name GoodFood. For us, what good food means is food that’s tasty, but also food that’s nutritious and that comes from a company that does good for the community it serves.”

To create tasty and nutritious recipes, GoodFood has a development team that includes two chefs and a nutritionist. They source food locally whenever possible and work to create weekly menus that are both seasonal and diverse. During the summer months, roughly 80-90% of what comes in the box is raised or farmed in Canada, and much of the produce is delivered within 5-7 days from when it is picked.

“We work as much as possible with local purveyors, so we’ll go directly to farms to get most of our ingredients. We try and encourage more local artisanal merchants as well. For example, we’ll do fresh pasta from a local Montreal family-run pasta maker. So it’s a mix of all that.”

And the company also makes a real effort to give back to the community. Since April of last year the company has donated a meal to a child in need at a school in a community the company serves for every box purchased by customers. Thanks to careful organization of food orders and portioning, there is also no food waste after the boxes are put together and shipped out for the week.

A large part of their appeal to customers is the value in the service; for less than $10/meal customers get all the ingredients for a delicious and nutritionally balanced meal and the opportunity to discover new ingredients and recipes.

“We try and make it so we’re giving enough value in the recipe that it would cost you about the same thing to buy the same ingredients at the grocery store. But you get them delivered, you get all the recipes, everything is nicely pre-portioned, and there’s no waste.”

At the end of the day, it’s the power to bring people together for a home cooked meal that is truly priceless.

“Good food is the type of service that really comes and gets people. And that’s what I love about it, that’s what we’re here for.”


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