HelloFresh is taking another big step toward strengthening its leading position in the U.S. meal kit market.
The German meal kit company is acquiring Factor75 Inc., a Chicago-based meal kit startup, for $177 million. Factor is a provider of fully-prepared, fresh meals that combine health, convenience and restaurant-quality taste.
The acquisition marks the next step in HelloFresh’s growth plan in the U.S. to strengthen its leading position and to expand its total addressable market. The acquisition brings together HelloFresh’s global expertise in delivering fresh ingredients to customers’ doorsteps across 14 countries with Factor’s success in ready-to-eat meals. Both companies say they share a strong vision for operational excellence and a data-driven approach to delight customers with great meals consumed at home.
“Direct-to-consumer ready-to-eat meals are a nascent food vertical that we believe has the potential to grow into a multi-billion dollar category over time. With Factor, HelloFresh, EveryPlate and Green Chef, we have four high-growth food brands in our Group, all benefiting from our strong growth engine, technology and supply chain infrastructure,” says Uwe Voss, CEO of HelloFresh US.
As a result of the deal, HelloFresh will gain its first office in the Chicago area, along with four production and fulfillment facilities. A new facility, which will be launched in the near future, will provide capacity to deliver more than $500 million worth of prepared meals annually. Factor’s full year revenue for 2020 is expected to reach around $100 million. Due to the complementary nature in product offerings, the acquisition of Factor will drive supply chain and operational synergies for both companies.
Founded in 2013, Factor specializes in providing fresh, ready-to-eat meals with a focus on health and wellness. Factor’s rotating menu of breakfast, lunch and dinner options feature Keto, Paleo, low-carb, vegetarian, plant-based and high protein meals that can be heated in the microwave or oven and are ready in minutes. With the addition of Factor to its existing U.S. brand portfolio - comprised of HelloFresh, EveryPlate and Green Chef - customers will benefit from a diverse and distinct meal offering for every need, occasion and price point.
“Since our founding, Factor has been at the intersection of taste, health, and convenience, providing simple, clean eating that not only tastes great but fuels consumers’ active and busy lifestyles,” said Mike Apostal, CEO of Factor. “By joining HelloFresh, the market leader in meal kits in the US, Factor will leverage new resources and category expertise to accelerate our growth, enhance our brand positioning and further amplify our mission.”
HelloFresh SE is the world’s leading meal-kit company and operates in the U.S., the United Kingdom, Germany, the Netherlands, Belgium, Luxembourg, Australia, Austria, Switzerland, Canada, New Zealand, Sweden, France and Denmark. In Q3 2020, HelloFresh delivered over 162 million meals and reached 5 million active customers. HelloFresh was founded in Berlin in November 2011 and went public on the Frankfurt Stock Exchange in November 2017. HelloFresh has offices in New York, Berlin, London, Amsterdam, Sydney, Toronto, Auckland, Paris and Copenhagen.