Startup Daily Harvest Reaches Unicorn Status With $1.1 Billion Valuation
(Bloomberg) -- Daily Harvest, a company that specializes in frozen-food products, including ready-to-blend smoothies, is valued at $1.1 billion after its latest round of funding, said founder and Chief Executive Officer Rachel Drori.
The New York-based startup reached so-called unicorn status by raising $77 million in an equity-funding round led by Lone Pine Capital LLC that included participation from Lightspeed Venture Partners, an existing investor, Drori said in an interview.
“Lone Pine understands our mission and sees the opportunity to shake up the entire food system,” Drori said. Greenwich, Connecticut-based Lone Pine has backed other consumer-focused companies, including salad chain Sweetgreen, luggage maker Away and Torchy’s Tacos, according to PitchBook data.
Daily Harvest, which ships frozen products including soups, latte pods, almond milk, plant-based ice cream and flatbreads directly to consumers, will spend a portion of its fresh funding on new distribution channels, Drori said. In January, the company will open its first brick-and-mortar location in Chicago, which it describes as a “tasting room” experience.
“There was an acceleration in consumers’ willingness to buy food online during the pandemic,” said Drori, who acknowledged that much of the population still hasn’t adopted the habit. “We want to allow our customers to experience Daily Harvest wherever they are.”
Other companies including Chobani have opened retail locations, in part to build brand awareness.
Founded in 2015 and launched the following year, Daily Harvest generated roughly $250 million of revenue last year. The company plans to invest further in its technology platform and expand its menu, which already includes more than 100 items for meals and snacks throughout the day. In January, the startup plans to add a “Harvest Bakes” collection of items that can be baked as an individual meal or side dish for a household, Drori said.
Daily Harvest says most of its ingredients are organic fruits and vegetables, and that its food doesn’t include any refined sugars, stabilizers or artificial additives. Freezing certain items on the same day they’re harvested leads to a higher retention of antioxidants, vitamin C and beta carotene than refrigerated options, according to the company’s website.
“The bigger we get, the more good we can do,” said Drori, adding that the company is focused on so-called regenerative agriculture, intended to reverse climate change through sustainable farming practices.
Because most of Daily Harvest’s produce comes from within the U.S., the startup hasn’t endured the supply-chain challenges impacting some of its larger rivals, Drori said, and it can innovate and tweak items faster than large conglomerates based on feedback. As an example, the company’s “Scoops” product was the result of customers balking at having to blend ingredients to make ice cream, preferring a ready-made option instead.
Daily Harvest was last valued at $380 million, according to data from PitchBook. Its earlier backers include Serena Williams’s Serena Ventures, Gwyneth Paltrow, Bobby Flay, 3L, VMG Partners and Suttona Capital.
Last month, the company added Mary Dillon, executive chair of Ulta Beauty Inc., to its board. A public-markets debut is a “viable option” for Daily Harvest, Drori said, without commenting on potential timing.
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