HelloFresh, the Germany-based international meal kit giant, has acquired an “approximately 10% stake” in its Russian counterpart Chefmarket. The amount of this investment (a capital injection) was not disclosed, but the companies mentioned a “single-digit million euro figure” in their announcement last week.
The deal is touted as “a strategic step for HelloFresh to tap into an emerging market with significant growth potential,” as the Russian food market is the fifth largest food market globally, according to Statista.
HelloFresh’s Chief Commercial Officer Ed Boyes underlined the “similar values” his company shares with ChefMarket, “especially when it comes to fresh, locally sourced ingredients and sustainability.”
He touted the deal as having a potential “impact on changing the way even more people eat.”
Founded in 2012 by Sergey Ashin, an ex McKinsey consultant, Chefmarket provides its customers with fresh, locally sourced ingredients on a recurring weekly basis, with meal kits manufactured locally. It employs more than 200 people to serve customers in Moscow, St. Petersburg and Nizhny Novgorod.
Unattained ambitions
Since its inception Chefmarket has received several capital injections from Mitsui, the Japanese corporation, on top of initial investments from Russian VC AddVenture.
There is a potential to reach 50 million households in Russia, Chefmarket believes. The startup says it became profitable last year with a turnover exceeding 1 billion rubles ($13.8 million at the average exchange rate of the year) — a sizeable number given the size of the young Russian market, but well below the $100 million target the startup had set for 2018.
HelloFresh, which has raised several hundreds of million US dollars from VCs so far, operates across 15 markets. Recently its Green Chef brand was launched in the UK while the company entered the Danish, Norwegian and Swedish markets.
HelloFresh’s management practices in the US do not seem aligned with the company’s “sustainability” principles touted by Boyes. These days, more than a thousand workers of chicken factories in Colorado and California are unionizing against “brutal working conditions,” which include “low wages and injuries,” as reported by Vice.com.
