Earlier this month Moscow-based food delivery startup Chefmarket.ru secured $1.3 million in a funding round led by Mitsui with participation from existing investors, including QIWI co-founder Andrey Romanenko and Russian venture fund AddVenture.
The startup aims to reach a $100 million revenue target in 2018.
Chefmarket offers home delivery of food products based on recipes from renowned Russian and Western European chefs. The concept is close to that of Western startups Blue Apron and Hello Fresh – which raised $135 million and $149 million, respectively, last year.
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.
Russian soup borscht, Thai soup Tom Yum and many other meals are featured in ChefMarket’s menu.
The startup claims to deliver over 60,000 meals in total every month with “almost zero marketing.” It currently covers three of the largest Russian cities: Moscow, Saint Petersburg and Nizhny Novgorod.
Chefmarket also used to serve Kazan, but left this city of nearly 1.2 million inhabitants since the local market was “not mature enough for such services,” Chefmarket founder and CEO Sergey Ashin told East-West Digital News.
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 not significant,” according to Ashin.
In November last year, Chefmarket.ru raised $5 million at a $25 million valuation, aiming to “build a $1 billion company within five to seven years.”
Asked why his company is securing a relatively modest additional amount just seven months later, Ashin said: “Mitsui is an important investor, therefore we agreed this additional round to secure a partnership with them. With their global presence and experience, they will really help our company develop further.”
1. What is Mitsui’s general strategy in the field of corporate venturing?
Mitsui is involved and develops its business activities in the value chains of various industries ranging from natural resources to infrastructure and consumer products in many different countries. While Mitsui is known for developing on its own large projects including energy resource and infrastructure development, we are also very active in collaborating with startups/technology companies to create new business and innovation in our existing business. At the same time, we bring solid value to our partners integrating the Mitsui’s diverse expertise and functions to grow together with them.
2. Why is Mitsui specifically interested in e-commerce / food delivery services?
We see that e-commerce is one of the fastest growing markets. In particular, online grocery retail has great potential since it accounts for less than 1% of total grocery sales.
3. What do you expect from your investment in Chefmarket.ru?
Today, Chefmarket demonstrates an excellent ability to attract customers with strong management led by Mr. Sergey Ashin. We will work to enhance the corporate value of Chefmarket with strong prospects for the meal-kit market globally and particularly in Russia. Our high level of trust to the existing shareholders of Chefmarket – including Mr. Andrey Romanenko with whom we have successfully cooperated in QIWI business, provides us with further confidence that we can succeed in this business.
4. Could you provide other recent examples of Mitsui’s investment in startups?
- Farmlink: a Chinese e-commerce platform for suppliers of raw goods and mid-sized restaurants over China.
- Black Swan: a London-based company providing big-data analysis for various industries, including retail
- Crayon Data: a Singapore-based big data startup whose solution helps businesses offer personalized choices to their customers.
- Mercari: The largest flea market app in Japan.
- Farmers Edge: A Canada-based global leader in precision agriculture and independent data management.
- OSI Soft: A manufacturer of application software for real-time data infrastructure.
