UK’s latest tech: London-based recipe box firm Gousto adds ‘unicorn’ status to its menu
The recipe subscription service has witnessed dramatic growth in recent years. In fact, this sector is one of the few, which has enthralled as a winner during the COVID-19 pandemic crisis. According to Hexa Research, the global meal kit delivery service market is expected to reach $8.9 billion (approx £7 billion) by 2025 with a CAGR exceeding 17.15%.
Gousto: UK’s newest ‘Tech Unicorn’
In this regard, Gousto, an online meal-kit manufacturer and retailer is one of them, contributing to the success of this sector and are popularly known as the ‘Spotify of food’. Now the London-based company has announced to have become the fourth UK-based company in 2020 to achieve ‘Tech Unicorn’ status, following Synk, Gymshark, and Cazoo.
In October last week, the London-based recipe-box startup backed by “body coach” Joe Wicks raised £25 million of new equity from existing investors Perwyn and BGF at a valuation of over US $1 billion. Post the funding, Gousto joined an elite group of 19 venture-backed UK businesses, including the likes of Deliveroo, that have achieved a valuation of at least US$1 billion.
So far, Gousto has gone through five funding rounds, raising over £155 million in equity from leading investors including Perwyn Private Equity, Canaccord Genuity, Unilever Ventures, BGF, MMC Ventures, and Joe Wicks.
Timo Boldt, Founder & CEO of Gousto comments: “Achieving tech unicorn status and joining the ranks of those elite companies that have attained a billion-dollar valuation is a proud moment for the entire Gousto team and all of our shareholders but we are still only just getting started. The market opportunity ahead of us is vast, as changes in consumer behaviour drive permanent change through the entire grocery market.”
He further adds, “Our obsession with technology enabled us to scale our operations at speed in the first half of the year to meet an unprecedented and rapid increase in demand, with monthly meal deliveries doubling from 2.5 million in January to 5 million in June. The latest £25 million fundraise will enable Gousto to scale further and faster, the triple capacity to serve more families during these difficult times, ensure the safety of our teams, and create jobs across the entire business. Gousto’s success is rooted in its absolute focus on delivering for its growing number of new and loyal customers the widest choice, the best value at the greatest convenience.”
Commenting on the same, Andrew Wynn, Founder and Managing Partner at Perwyn commented, “We continue to be excited about the sheer size of the market opportunity and impressed by the management team’s ability to deliver on its plans and navigate the complex challenges of 2020. Gousto’s superior technology and scale underpin its winning customer proposition and support its continued leadership of this fast growing and profitable sector.”
How will the funding be used?
The company intends to use the funding to triple its capacity by 2022 with three new customer fulfillment centres and the creation of 1,000 new jobs over the period. Notably, Gousto’s second fulfillment centre in Lincolnshire is scheduled to go live before the end of 2020.
How was Gousto born?
Gousto was founded in 2011 by James Carter and Timo Boldt who share a passion for food and cooking. However, the duo didn’t get much time to go to various grocery shops and also found it difficult to cook recipes from online databases or follow cook-along TV shows. And thus the idea for Gousto was born.
Uses AI & automation to provide extensive choice and personalisation
This UK online ‘tribe’ styled platform provides users with all the ingredients in the right proportions to cook delicious meals at home. Users get to choose the recipe online and it is updated with new recipes every week. It’s worth mentioning that the recipes are delivered right to your doorstep once a week.
Well, the company uses its proprietary algorithms which maximises the speed of pick-up, daily volumes, and pick accuracy, whilst minimising cost and food waste. As per the company claims, the revenues for the three years ending December 31, increased six-fold between 2016 and 2019 and growth has remained strong with revenues for the first half of 2020.
Surpassing the £83 million (approx $108 million) reported for the whole of 2019, Gousto has been profitable since Q4 2019 and expects to generate a significant profit in 2020.