Other investors included Baseline Ventures and Founders Circle Capital. This latest funding round brings total investment in the company to $52 million. A recently opened facility in the Midwest allows it to deliver to 98% of the U.S., making it the biggest direct-to-consumer provider of organic food in the country, the company claims.
"Having reviewed a large number of meal kit players in the United States, we have been really impressed by Sun Basket's extremely fast growth and category leading customer retention rates," Olivier Garel, head of Unilever Ventures, said in a release. "Over a relatively short period of time, Sun Basket has built a clear leadership position as the best healthy, organic meals service platform, addressing consumers' growing demand for healthy, tasty, diet-specific but convenient solutions.”
The meal kit market has expanded rapidly, with global sales topping $1 billion in 2015, according to Technomic. The U.S. alone accounts for about 40% of the market. Technomic predicts the U.S. market alone will grow ten-fold during the next five years as consumers are drawn to the convenience and adventurous eating that meal kits provide.
Unilever’s venture capital arm says it aims to invest in young, promising companies. The consumer products company is able to give startups access to its global distribution network and expertise. Its investment portfolio includes several small companies with innovative approaches to environmental issues, such as water use and recycling, as well as others that occupy a particular online niche, such as recipe and shopping platform Yummly. Sun Basket is somewhere at the crossroads of these trends, promoting a modern, convenient way of shopping and eating, as well as environmentally responsible ingredient sourcing.
Unilever’s investment in Sun Basket is a major endorsement, not just for the company, but for the meal kit phenomenon as a whole. Less than a year ago, market research firm The NPD Group questioned the market’s staying power, suggesting the trend was less widespread than the hype would suggest. However, earlier this year, Nielsen found that one in four adults had bought a meal kit over the previous 12 months, with 70% going back for more after their first purchase.
Sun Basket’s customer loyalty was a deciding factor for Unilever Ventures, the company said, as well as the market niche the start-up has carved for itself in providing organic ingredients and healthy recipes for those following specific diets. With so many meal kit companies including Blue Apron and Hello Fresh in the marketplace, not all are going to survive. With Unilever's backing, Sun Basket is off to a good start.