Shortly after the start of the coronavirus pandemic in March 2020, Jeff Grass questioned the future of Hungry, a startup he co-founded in late 2016. Hungry partnered with local chefs in several markets major and provided catering for businesses. But after the pandemic, most companies left their desks and made their employees work from home, a trend that has largely continued to this day.
Yet despite the sharp decline in demand for office catering, Hungry has expanded beyond its core business to host virtual kitchen events and provide last mile delivery to packaged meal businesses. This led to a doubling of revenues last year compared to 2019, putting themselves on a solid financial footing and catching the attention of investors.
Hungry recently raised $ 21 million in a Series C round that values the company at over $ 200 million. That’s more than double the company’s $ 100 million valuation as a result of its $ 20 million Series B cycle in early March 2020 just before the pandemic.
Several venture capitalists and athletes were among the investors in the final round, including Arizona Cardinals wide receiver DeAndre Hopkins, Chicago Bulls goaltender Lonzo Ball and heavyweight boxer Deontay Wilder. Other athletes and celebrities who invested in previous rounds included Jay-Z through his fund Marcy Venture Partners, actor and comedian Kevin Hart, Detroit Lions defensive tackle Ndamukong Suh, celebrity chef Tom Colicchio and former Whole Foods Market
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Grass noted that a special purpose acquisition company approached Hungry this year to take the company public, but Hungry refused to pursue that route. Instead, he chose to increase the round of the C Series, which took less than three weeks to increase. Grass added that the company hopes to go public within the next two to three years and sees no need to raise capital by then. The company has now raised a total of $ 53.6 million.
“We believe this is more than enough funding to be our last round before going public,” said Grass, Managing Director of Hungry. “We have a pretty healthy war chest at this point in terms of cash flow.”
He added: “The thesis beyond finance (Series C) is that there is a return to power that will start to take shape, the competitive landscape has really changed dramatically. Many players in the market have gone bankrupt. Others have really shrunk in size, reducing their teams by two-thirds or three-quarters. We continued to refine and refine our model until we had a fundamentally better solution on the market and plenty of opportunities to fill in the white space across the landscape. “
Grass and his brothers Eman Pahlevani and Shy Pahlevani founded Hungry almost five years ago after noticing that there was a dearth of quality and affordable food options for their employees at LiveSafe, a communications platform of mobile security. They started Hungry in Washington, DC, in partnership with local chefs they control who cook in licensed commercial kitchens.
Hungry negotiates the price he pays cooks and then sells the food to companies looking to feed their employees. Hungry, which has a minimum order of $ 200 for businesses, can keep costs low because it doesn’t own any buildings or real estate, and doesn’t need a lot of space for its cooks to prepare meals.
“We realized that companies had grown dramatically over the past 10 or 20 years in how much they invested in regularly bringing food to feed their teams,” Grass said. “But they were fully served by traditional restaurants and caterers, none of which were ever designed to provide food for an office.”
Since the launch in Washington, Hungry has expanded to Atlanta; Austin, Texas; Boston; Dallas; New York City; and Philadelphia. This month, the company opened in Los Angeles and plans to open in San Francisco next month. Next year, he’s looking to target other cities, including Chicago; Charlotte, North Carolina; Denver; Houston; and Phoenix.
Hungry’s relationship with chefs has helped her during the pandemic with the launch of Virtual Xperiences, which caters to companies looking for team building for their employees or connection with customers. Through this program, companies hire chefs for $ 1,000 and ask them to present a cooking show or demonstration to their employees and / or customers. Hungry sells food kits from $ 75 to over $ 300 a piece and distributes them to people so they can follow the chef and prepare meals.
Hungry was also able to expand its delivery and logistics services during the pandemic, partnering with meal prep companies that saw demand rise as people ordered food online.
Although Hungry plans to continue with virtual Xperiences and the delivery service, the company expects the bulk of its revenue to come from catering for businesses and sees businesses start returning to their offices later this year. year and next year. The company now has 85 full-time employees and around 200 part-time employees who help with catering, logistics and delivery.
“I wish (the pandemic) never happened,” Grass said. “But I think we’re coming out on the other side a little bigger and stronger than we started out. It just puts us in a great competitive position.