Blue Apron Raises $50 Million to Deliver Do-It-Yourself Meal Kits, Recipes

Tech companies offering Web and mobile food-ordering services are doing brisk business. A new, $50 million investment in Blue Apron is one of the larger venture bets in this bustling category.

Stripes Group led the Series C investment in Blue Apron, joined by the New York startup’s earlier backers including Bessemer Venture Partners and First Round Capital, said Matt Salzberg, Blue Apron’s chief executive and a former venture capitalist.

Investors involved in the deal confirmed a post-money valuation of $500 million for Blue Apron.

Is this a peak for the food tech sector, or maybe just the start?

According to Dow Jones Venture Source, in 2009 venture capitalists in the U.S. funded 24 food-relevant companies, compared to 57 deals in the category in 2013. This year, U.S. venture investors have already backed 20 food-relevant businesses.

The trend is also rising worldwide: Latin American venture investors did six deals in the sector last year but none in 2009. And European venture capitalists backed 13 food-related startups in 2009, up to 24 in 2013, and have already backed 12 food-related startups this year.

For its part, Blue Apron delivers “meal kits”–including pre-measured ingredients and recipe cards–in refrigerated boxes to members, who subscribe to the service for about $60 a week. The subscription translates to a cost of about $10 a meal per person, with most typical customers getting 3 meals a week for a party of two.

Users choose from six recipes, which the company changes each week. If they’re traveling, or don’t want anything from that week’s menu, customers can “roll over” their meals to another week.

The company’s most direct competitors include Plated.com (Dine In Fresh), which raised $5 million earlier this year in a round led by ff Venture Capital, and the angel-backed Chefday.com.

Its subscription commerce model allows Blue Apron to predict and buy just the food it needs to fulfill orders weekly, minimizing food waste, and keeping overhead much lower than any traditional or online grocer’s, the CEO said.

Blue Apron negotiates bulk rates on ingredients with food producers and suppliers in different local markets each week, Salzberg added. It aims to introduce home chefs to local, in-season ingredients they may not find in their neighborhood groceries, or may have not have tried without the guidance of a Blue Apron recipe.