One of the leading fresh-prepared meal delivery services in the United States was officially acquired by food and beverage giant Nestlé.
According to WallStreet Journal, as announced Friday, Nestlé SA took full ownership of Freshly in a deal that values the online prepared-meal startup at $950 million.
Additional reports from Fox Business also reveals that Nestlé could pay up and an additional $550 million to Freshly upon hitting specific growth targets.
Freshly was founded in 2015 and primarily focuses on delivering a menu of fresh, chef-cooked meals to its subscribing members all over the U.S.
The success of Freshly was attributed to creating an easy way to eat healthily. At present, Freshly is shipping more than one million meals per week to customers in 48 states across the nation.
Additionally, it has a forecasted sales of an estimated $430 million in the U.S. market. It has expanded into offering B2B services to assist companies in providing meals to their employees working from home.
According to Freshly CEO Michael Wystrach revealed that the B2B service had been quickly growing, even faster than its core consumer business.
On the other hand, Nestlé is known for being the largest food and beverage company globally. With a U.S. headquarters in Arlington, Virginia, it currently holds brands like Nescafé, CoffeeMate, DiGiorno, Stouffer's, Kit-Kat, Haagen-Dazs, and Cheerios in its portfolio.
This is not the first time that Nestlé and Freshly have worked together. In June 2017, Nestlé led Freshly's $77 million Series C run. It means Nestlé purchased an approximately 16 percent stake in Freshly as part of a strategic move to evaluate and test the expanding market.
Wystrach said that, to some degree, the 2017 stint with Nestlé initiated the current acquisition.
This acquisition brings together Nestlé's deep understanding of what and how people eat at home and Freshly's specialized consumer analytics platform and distribution network.
This move is expected to provide more growth opportunities within the Freshly business and across Nestlé's portfolio.
CEO and Nestlé USA Chairman Steve Presley said that they are extremely excited to welcome Freshly to the Nestlé family, and adding it to their portfolio accelerates the company's ability to capitalize on the new possibilities in the U.S. food market.
In addition, he said that this further positions Nestlé to win in the future, all thanks to Freshly's innovative, fast-growing capabilities.
Freshly CEO Michael Wystrach also expressed his excitement with the acquisition and said that with the partnership with Nestlé, they will now have access to resources, research, and development, and years of experience to move closer to their goal of being in every household in America.
It also reinforces the company's mission of making healthy eating easy and accessible by bringing nutritious, high-quality meals directly to customers' homes.
Freshly is grateful for the tons of support coming from Nestlé. Moving forward, Freshly is expected to focus more on accelerating growth and offering more variety and quicker delivery times to its customers, and reaching people in different places.