Food52 Closes $83MM Majority Investment by TCG Capital Management
NEW YORK, Sept. 30, 2019 /PRNewswire/ -- Food52, the premier kitchen and home brand, announced today a majority investment by TCG Capital Management ("TCG"), an affiliate of The Chernin Group, LLC, to finance its continued growth and expansion. TCG is investing $83MM in Food52 at a nine-figure valuation to enable the leading content-and-commerce innovator to develop offline retail, expand its in-house product line Five Two, and fuel business development and strategic partnerships.
Food52 built a digital hub combining content, commerce, and community around the belief that the kitchen is at the heart of the home and food is the center of a well-lived life. With this innovative approach, Food52 has upended the cooking space and become the dominant player, recognized four times by Inc. as one of the fastest-growing private companies in America on its Inc. 5000 list. Food52 sells more than 5,000 kitchen and home goods via drop shipment through its e-commerce platform, the Food52 Shop, and nearly half of those products are exclusive to Food52. The Shop accounts for 75 percent of Food52's total revenue, and revenues from e-commerce have been averaging 50 percent growth YoY. Food52's paid marketing spend accounts for only 5 percent of its commerce revenue; the rest comes organically from its highly engaged community of more than 16 million people.
Like other disruptive, aspirational brands in The Chernin Group's portfolio such as Headspace and MeatEater, community and authentic engagement are the lifeblood of Food52. The site harnesses hundreds of thousands of reader-shopper opinions to create products including kitchen knives, cookware, and tableware that constitute the brand's line, Five Two.
In the coming year, Food52 plans to use this new capital infusion to open a brick-and-mortar retail flagship and to expand its Five Two line, hich has already become the most profitable brand in the Food52 Shop. Food52 will also use the investment to supercharge its content, video, and product and engineering teams, equipping them to grow the business into its next decade.
"Our true north star is our community and our dogged belief that many is better than one," said Merrill Stubbs, Food52 Co-founder and President. "We met our ideal partner in TCG, which shares our vision and values for building a community-driven consumer brand."
"This injection of new capital unlocks tremendous growth opportunities, allowing us to reach new markets, create new retail channels, and invest in technologies that will serve our community better," said Amanda Hesser, Food52 Co-founder and CEO.
TCG, which has a strong track record of investing in and partnering with consumer businesses with passionate communities, is committed to supporting Food52's mission "to inspire people to eat thoughtfully and live joyfully." "At TCG, we strive to work with founders like Amanda and Merrill who put their audience first," said Mike Kerns, Partner at TCG. "After a decade of thoughtful content curation, product development, and community engagement, Food52 has achieved the ultimate measure of success in digital media and built a brand that consumers care deeply about. We couldn't be more excited to partner with the team on this next phase of growth."
GCA Advisors, LLC, acted as the exclusive financial advisor on this transaction. Lowenstein Sandler provided legal advice to Food52 and Gibson Dunn represented TCG.
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