Food delivery service Marley Spoon (ASX: MMM) has received further commercial support, securing A$4m in funding from supermarket operator Woolworths (ASX: WOW).
The subscription-based, meal-kit delivery service that currently operates throughout Australia, Europe, and the US delivers raw ingredients and cooking instructions to the door of their customers. The convenience of delivery and the variety of meals, which include fast, family-friendly, and vegetarian options, allows even the busiest and most health-conscious people to cook for themselves, without going to the shops.
Consumer behaviour in the past year suggests that the online grocery sector is up 11.6% in one year, suggesting Australians want convenience. Fabian Siegal, Co-Founder and CEO of Marley Spoon said that Marley Spoon “has built a A$200,000,000 run-rate revenue business that continues to grow fast as consumers continue to switch from offline shopping to online meal-kits.” Commenting further that the company thinks this is only the start of consumer adoption.
The news comes three months after the announcement that Marley Spoon and Woolworths entered into a strategic partnership, in which Woolworths agreed to a A$30m funding deal for the marketing of both the Marley Spoon and Dinnerly, a subsidiary budget-friendly brand.
The loan facility from Woolworths may be viewed as a strategic move to gain access to time-poor consumers who no longer shop via traditional means, with the terms of the 5-year loan facility enabling Woolworths to redeem the convertible bond for MMM shares after two years. Beyond the $4m investment from Woolworths, Marley Spoon also received a further $4m investment from Union Square Ventures under a similar convertible bond arrangement.