Moscow-based food delivery startup ChefMarket.ru has just raised $5 million at a $25 million valuation from its existing shareholders, including AddVenture and the startup’s founder and CEO Sergey Ashin.
ChefMarket offers home delivery of food products based on recipes from renowned Russian and West-European chefs. The concept is close to that of Western startups Blue Apron – which raised $50 million last year, – Hellofresh and Plated.
Along with groceries, ChefMarket customers receive step-by-step photo instructions. A subscription offer allows customers to select three or five meals to be delivered weekly. Among the subscription meal sets is a comprehensive weight reduction program powered by French nutritionist Pierre Dukan.
The startup claims to deliver over 60,000 meals in total every month with a three-fold yearly growth and “almost zero marketing.” It currently covers four or the largest Russian cities: Moscow, Saint Petersburg, Nizhny Novgorod and Kazan.
ChefMarket estimates its market share at approximately 50%, with three other players — Domavkusnee.ru, Partiyaedi.ru, Elementaree.ru — holding the rest. “There are a few dozens of other smaller players, but their activities are insignificant. And we are the only player to be present in several cities,” Anshin wrote in an exchange with East-West Digital News.
ChefMarket intends to develop further its subscription model, which is now “skyrocketing,” says Anshin.
Russian soup borscht, Thai soup Tom Yum and many other meals are featured in ChefMarket’s menu.
In a domestic grocery market that exceeds $100 billion, the entrepreneur sees “an opportunity to build a $1 billion company,” he said, referring to ChefMarket’s potential valuation “within five to seven years.”
The startup aims to generate as much as $100 million in revenues by 2018. This goal stems from the company’s current growth rate, 200% yearly, if maintained over the next few years. “We may thus reach $14 million in 2016, $36 million in 2017, and finally reach the $100 mark the next year,” says Anshin — who considers potential acquisitions only as a way to accelerate organic growth.
Currently ChefMarket’s revenues are above $300,000 monthly.
The project was launched in 2012 by Ashin, an ex McKInsey consultant and alumni of the London Business School MBA program, in a bid to “revolutionize the notion of preparing food at home.”
ChefMarket raised $2 million in several rounds of financing which took place in late 2013 and 2014, involving Russian venture fund Addventure and an undisclosed individual investor. Moscow Seed Fund, the venture arm of the Moscow city authorities, also supported the startup with a non-convertible loan.
