A common adage has it that in order to function you need to pick two out of the following three: work, social life, and health. But why sacrifice your health when you could take care of it with a simple click of a button?!
FRESHLY is a website “catered” to your health needs, delivering gourmet meals to your doorstep for an affordable price. Using only natural ingredients with the option of three meals a day, never again will you have to lazily pop a few waffles in the toaster. Gone are the days of settling for another day without your recommended amounts of veggies.
Today we sit down with Michael Wystrach, cofounder and CEO as he explains the company plans to expand from coast to coast, serving the entire U.S by 2016.
Who were your investors and how much did you raise? Was it seed, Series A, B, etc.?
This was a Series A funding lead by Highland Capital Partners with participation by White Star Capital and Jason Finger (co-founder of Seamless).
Tell us about your product or service.
FRESHLY is a ready-made meal delivery service focused on making healthy eating easier than ever by delivering high-quality, professionally prepared, affordable meals straight to your doorstep every week.
What inspired you to start the company?
Despite trying to stay in shape, my diet started catching up to me in my thirties. I never wanted to shop or cook and I remember wishing that I could go home to a fridge already stocked with healthy, delicious meals. Since a personal chef wasn’t a feasible option, my frustration mounted and I decided to devise a way to make this happen. I worked with Dr. Frank Comstock M.D., a physician with an anti-aging practice and a nutrition and wellness expertise, to develop the meals and began preparing them out of my family’s restaurant in AZ. I opened the service to family and friends and it just took off. I then recruited my co-founder Carter Comstock (Dr. Comstock’s son) to help me launch the concept, with a goal to disrupt the food industry and make healthy eating convenient for the masses. After consulting with a team of nutritionists, professional chefs and undergoing extensive taste testing, FRESHLY was born.
How is it different?
As you know, there are a number of great companies popping up in the Food Tech space. The biggest difference between FRESHLY and a meal delivery kit (i.e. Blue Apron, Plated, Gobble & HelloFresh), is our focus on ultimate convenience. With FRESHLY, there is no shopping (same in the meal kit model), but there is also no cooking or cleaning – saving you the hours it would take to get your meal kit prepped, cooked and cleaned. Another distinguishing quality is our dedication to the use of healthy ingredients. In addition to using organic and locally sourced ingredients whenever available, we also have additional meal customization filters, which you may not find with other companies. We never use any processed sugars, gluten, MSG, artificial coloring, artificial flavoring, hormones, or antibiotics as just a few examples of our first level screens. As far as price goes, we rival Blue Apron (about $1 more), HelloFresh (about $.30 more) and come in at a lesser cost than others. Another key differentiator is that we offer breakfast, lunch and dinner while most meal kit companies solely offer dinner.
Overall, we do not feel as though these companies are our direct competition. You can easily be a Blue Apron customer who loves cooking a couple of meals a week, and simultaneously be a FRESHLY customer with 6 meals delivered weekly that are ready to eat at the exact moment you are. Food that fits your lifestyle.
Similarly, FRESHLY is set apart from an on-demand meal delivery services (i.e. Munchery, Sprig, Spoonrocket, Maple) by our focus on ultimate convenience. Freshly offers healthy meals on hand, ready when you are – no limited options, no sold out meals, and no waiting a hungry 45 minutes for your delivery. Our 4 different subscription options and diverse, 36 item menu (Breakfast, Lunch & Dinner) are optimized for you to build the plan that best fits your lifestyle. Whether you arrive home late from work and want a quick, healthy, great tasting meal, you are up early for a workout and crave an amazing omelette or are wanting to pack your own lunch, we want to make your life a little easier. Our no-commitment weekly subscription model makes it easy for you to always have the meals you love ready when you are. As an additional bonus, with FRESHLY, you never pay for delivery and you are never asked to tip.
Customers aren’t limited to SF, Palo Alto, or LA for door-to-door delivery. You can live in San Jose, Bakersfield, or Reno – anywhere in the 9 states to which we currently ship (set to expand to 35 states by the end of this year). From the city to a small ranch in Elgin, Arizona (where my parents live, population 50 people!), you can enjoy FRESHLY.
What market you are targeting and how big is it?
We began in 9 western states and are increasing our market with this new funding; we will be available to 80% of the U.S. by the end of 2015 and 100% of the continental U.S. by the end of 2016.
What’s your business model?
We are a web-based, direct to consumer subscription model. We consistently rotate new and improved meals to ensure our customers always have an exciting menu from which to choose. Our model was optimized to make it as easy as possible for our customers to have FRESHLY meals on hand whenever they want them, with the flexibility for customers to customize and manage their personal accounts, from their delivery dates to their meal choices, on a weekly basis. We own the entire process of sourcing ingredients, prepping, cooking and packaging, everything except shipping logistics, where we partner with FedEx. We ship from a centralized production / distribution facility (similar to Blue Apron) and we reach a large number of customers from this single location. This allows us to use economies of scale to drive down cost for our customers, offering them an experience that used to be reserved for the very rich for around $10.50/meal.
What was the funding process like?
Very exciting! There has been significant traction in the food tech space and we were honored to be meeting with those investors we were lucky enough to sit down with. It was our best case scenario to have Highland Capital Partners, White Star Capital and Jason Finger closing our Series A. We are very fortunate to have such talented people on our team. Bob Davis is a true legend in the tech world and if you would have asked me a year ago who would a dream board be made up of, Bob would have been on the top of that list. It is a privilege to be able to pick up the phone and get some quick (extremely valuable) advice from Bob.
What are the biggest challenges that you faced while raising capital?
Managing the growth of the business while simultaneously meeting with VCs nationwide. There were a lot of moving parts but it was the most exciting phase since the original launch of FRESHLY. While we were raising money we went from 15 employees to 50 employees in just 2 months and nearly quadrupled our sales. Plus, we were moving to NYC from Phoenix. Let’s just say my co-founder and I weren’t sleeping a lot, but it was a ton of fun!
What factors about your business led your investors to write the check?
The belief that FRESHLY really is a vehicle to disrupt the massive food industry and change the way we think about buying and consuming food. We want FRESHLY in every home in the U.S., and our investors support that vision. Our investors share in our belief that the food tech industry is going to become a massive portion of the overall $1.2 trillion food market, and FRESHLY is going to be a big part of that.
What are the milestones you plan to achieve in the next six months?
In the next six months, we plan to ship 700,000 meals, bringing us to about 1 million meals within our first year! We will work to launch our east coast operation by opening a second production facility in New Jersey, while simultaneously expanding the current west coast operation. On the product side, we are always working to improve our menu. We plan to add exciting, innovative meals with partnerships from the nation’s most talented chefs. Stay tuned – there are going to be a lot of fun exciting announcements and partnerships from FRESHLY in the coming months.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Nail your metrics! In our experience, investors are looking to fuel an existing high potential business with a very scalable product and business model, as opposed to build one. If you have solid margins, CPA and LTV, you should be able to find interested investors. Focusing on those metrics really allows you to dig into your model to see what’s working and what’s not. Actually, maybe even more important than that is to build a great team. Every investor will tell you (and it is very true), in the early stages, investors are betting on the people not the idea. A group of great people can do great things!
Where do you see the company going now over the near term?
In the near term FRESHLY will be focused on national expansion. We hope to be able to service the entire country by the end of 2016.
Where is your favorite place to grab a drink in NYC on a nice summer night?
Wow this is a tough one because there are so many great spots, but my favorite place in the city right now is Dear Irvine. It is a speak-easy bar and they make some mean cocktails. Additionally, they know their mezcal, and as a ranch boy who grew up near the Mexican border I love a bar that knows their mezcal. The other spot I love is the Pier Cafe on the Hudson. I’ll walk my dog down and grab a beer for me and a water for him. We both have a great time watching the sunset.
