U.S. organic food delivery service Sun Basket said on Thursday it had raised $9.2 million in a fundraising round led by Unilever Ventures, the venture arm of consumer products company Unilever Plc (ULVR.L) (UNc.AS).
The San Francisco, California-based food service company will use the funds to expand its distribution, as it looks to expand its footprint in the growing industry of companies that deliver fresh ingredients and recipes to subscribers.
The round follows Sun Basket's first series C fundraising earlier this year, and brings total C funding to $24.2 million. To date, Sun Basket has raised $52 million, from investors that include Baseline Ventures, PivotNorth Capital and Accolade Partners.
Sun Basket declined to disclose its valuation, though Reuters has previously reported the company is valued at between $500 million to $1 billion.
The food delivery market, a new category that has grown in popularity over the past couple of years, includes Blue Apron, the largest company in the market, as well as HelloFresh in Europe and Chefs Plate in Canada.
The increasingly crowded industry has already seen some casualties, as many companies have struggled to cover their costs but still keep the deliveries at an attractive price for consumers. Food-delivery startup Maple announced it was shutting down this week, about a year after SpoonRocket made a similar announcement.
While SunBasket is not profitable, it distinguishes itself from its competitors by catering to customers with particular dietary preferences or needs, such as vegetarian or gluten-free meals, Sun Basket CEO Adam Zbar said in an interview. Such customers tend to be more loyal and willing to pay more than other food shoppers, he added.
Sun Basket is not concerned about its larger competitors, such as grocer Kroger Co (KR.N), which this week announced its own meal kit delivery plans, because delivery services are not tied to the same infrastructure as stores, Zbar said.
He added that competitor and online retailer Amazon.com Inc's (AMZN.O) strength lies in being a platform to sell products, not in creating them.
"You can't dis-intermediate us, because we are a product company, not a just an e-commerce company," Zbar said.
Zbar would not comment on a previous Reuters report that the company has hired investment banks to prepare for an IPO.
(Reporting by Lauren Hirsch in New York; Editing by Miral Fahmy)