SEMCAP Food & Nutrition Invests In Canadian Meal Kit Company

Growth equity firm SEMCAP Food & Nutrition announced a “large minority investment” in Canadian meal subscription service Fresh Prep. Financial terms were not disclosed.

Founded in 2015, Vancouver-based Fresh Prep delivers zero-waste meal kits across British Columbia, Alberta, Ontario and Quebec, offering a menu of several dozen ready-to-cook and ready-to-eat meals, plus a large selection of grocery staples. The Certified B Corporation has a dedicated delivery fleet that enables tighter quality control and real-time delivery tracking while offsetting carbon emissions.

According to a press release, Fresh Prep generates more than CAD$100 million in annual revenue.

“Fresh Prep is a perfect addition to our portfolio as we invest behind innovative food companies that support sustainable modern health and a better future for food,” said Kate Storey, partner at SEMCAP Food & Nutrition, in the press release.

As part of the deal, Storey joins Fresh Prep’s board of directors to support the founding team in efforts to expand its delivery footprint and improve customer service. Previous investors in the company include Renewal Funds and Longo Family Capital Corporation.

SEMCAP Food & Nutrition, led by John Haugen, Ryan Newcom and Storey, focuses on environmentally sustainable, high-growth businesses with more than $25 million in revenue. Its portfolio includes ALOHA, Good Culture, Kite Hill and Purely Elizabeth.

“With extensive operational expertise in the food and nutrition space and an impact-driven investment strategy, SEMCAP Food & Nutrition is the ideal partner for our next phase of growth,” said Dhruv Sood, co-founder and co-CEO of Fresh Prep, in the release. “Kate and the team are completely aligned with our mission, immediately recognizing sustainability as an important differentiator in our space.

“We look forward to tapping the operational expertise within SEMCAP’s platform and broader network to help accelerate the expansion of the Fresh Prep brand and work to maintain high double-digit topline growth this year and beyond.”

The highly fragmented meal delivery market has seen a shakeup in recent years, as leading brands looked to grow either through consolidation or expansion into grocery stores.

A decade ago, direct-to-consumer meal kit subscription services like Blue Apron and HelloFresh had blanketed the market with a strong pitch to consumers centering on convenience, wellness and quality ready-to-cook food they could have shipped to their doorsteps. While the pandemic reignited demand, the subsequent slowdown saw several former category leaders cease operations or pivot to focus on in-store offerings.

While some companies have struggled to maintain momentum, others appear to be thriving. In June, white-label meal delivery platform Mealogic secured $16 million in funding to support continued growth. The company partners with healthcare providers and wellness brands to develop prepared meal delivery programs that meet specific dietary needs and offers a suite of services spanning menu development, payment processing, food production and national fulfillment and logistics.