Woolworths has announced it is loaning mealkit provider Marley Spoon approximately $4 million – bringing its total investment into the business to approximately $34 million.
The loan, which is mirrored by a second $4 million loan by US venture capital firm Union Square Ventures, will help Marley Spoon continue growing despite recording a $35 million loss during its half-year result.
“We are happy to see the continued support of key investors and strategic partners in the ongoing growth of Marley Spoon,” Marley Spoon co-founder and chief executive Fabiel Siegel said.
“Over the past few years the Marley Spoon team has built a $200 million run-rate revenue business that continues to grow fast as consumers continue to switch from offline shopping to online-meal kits.
“We believe we are just witnessing the beginning of consumer adoption in our industry.”
The supermarket agreed to invest $30 million into Marley Spoon in June over the next five years, which will culminate in Woolworths owning a nine per cent stake in the meal kit company.
Woolworths’ funds will be provided to Marley Spoon by way of a commercial loan facility which will mature after six months, while Union Square Ventures’ loan facility will mature after three years.
Despite recently reporting a half-year loss, revenue improved 55 per cent for the period to $99.5 million – attributed to repeat customers beginning to upsize on orders.
“We are operating in a high growth category that is just starting to switch from offline to online shopping,” Siegel previously said.
“To capture this opportunity, we are building the infrastructure and laying the foundations for a large, globally operating, direct-to-consumer brand business. Out first year as a public company was an important milestone in this journey and we look forward to continued growth ahead.”
According to Woolworths chief executive Brad Banducci, the partnership aligns with the supermarket’s goal of meeting its customers needs for healthy and convenient meal solutions.
“Marley Spoon has demonstrated it has a customer focused, innovative and entrepreneurial culture and we are excited to partner with them,” Banducci said.