Axios Pro Exclusive Content

Hungryroot puts off 2024 exit to grow revenue

Illustration of a bag of groceries on a conveyor belt wrapped around a cell phone.

Illustration: Lindsey Bailey/Axios

Hungryroot, a hybrid meal-kit and food delivery service, is punting a near-term exit as it builds on the $333 million revenue it booked last year, CEO Ben McKean tells Axios.

Why it matters: The company, which bills itself as an AI-powered personal grocer, is staying a steady course while competitors struggle and consolidate.

The latest: Hungryroot is still waiting for markets to normalize, but the company is well-capitalized and McKean reiterated that it remains prepared to pursue an IPO or sale when that happens.

By the numbers: Hungryroot's revenue grew 40% in 2023 versus 2022, when it was $237 million, while EBITDA was $9 million last year.

State of play: Over 100 meal delivery companies have shuttered over the past year, based on Hungryroot's internal data, including Nestle's Freshly, Jumia Technologies and Food Rocket.

  • Startups in the space collectively raised some $1 billion mid-pandemic in 2020 and 2021 by pitching the idea to investors that consumers wanted their food delivered within 15 minutes, McKean explains.
  • But the average order value is often too small, while the operations of meal kit companies are very complex, he adds.

The big picture: HelloFresh is Hungryroot's only growing and profitable competitor, McKean says.

  • Instacart is a rival on the delivery side, though McKean claims Hungryroot's average order value is $125, while Instacart's is about $105.

What they're saying: "We're trying to be known as a personal assistant for healthy living," McKean says.

  • In that vein, the company is adding products like functional beverages and supplements to its menu, which also increase average order value cost efficiently.

Catch up quick: In 2021, the company was valued at $750 million after securing $40 million from L Catteron.

Editor's note: This story has been updated to clarify that Hungryroot could elect to pursue a sale or an IPO when markets normalize.

Go deeper