The fast-food delivery model continues to gain validation, as Munchery, the San-Francisco-based service specializing in microwavable meals, is close to finalizing a funding round of as much as $85 million.
The Wall Street Journal reported Friday (May 22) that the latest funding round would value the company at roughly $300 million, according to a source knowledgeable about the deal. The financing includes two investors who had previously invested in the company, Menlo Ventures and SherpaVentures. Since its founding in 2010, Munchery has raised $30 million. The SherpaVentures investment would represent the VC firm’s largest single investment since its founding two years ago by Shervin Pishevar, one of Uber’s early financial backers.
Munchery takes its place among fast delivery meal options competing with takeout in major cities. The company offers entrees at a price range between $9 to $14, not including a $3 delivery fee, with a delivery window of between 20 to 40 minutes. The Munchery financing ties in with recent announcement to fellow gourmet meal delivery companies including Sprig, which swallowed $45 million in funds from investors in April, and Blue Apron, a “do it yourself” meal kit delivery option that could snare a valuation at around $2 billion.
There’s a bit of difference between the business models, noted The Journal. Munchery’s deliveries are brought to the doorstep cold and need to be heated; that allows for greater volumes of food production and delivery over a wider geography without the specter of food spoilage. And while peers rely on independent contractors for laborers, Munchery has its own staff of full-time drivers who also enjoy benefits.