The Peloton Of Home Cooking? Amidst Rapid Pandemic Growth, Tech-Enabled Meal Kit Company Tovala Lands A $30M Series C

‘The Peloton of’ may just be the new coveted term across industries, given Peloton’s rocketship growth, no doubt fueled by changing pandemic behaviors. The tech-enabled home fitness company tripled its paid subscriber base between 2019 and 2020. In food, there are few companies that parallel Peloton’s offering, combining an all-in-one tech-enabled experience with premium content and aspirational partnerships, all in the comforts of home.

This is why investors have made another bet on Tovala, the meal company that pairs smart-oven technology with fresh meals delivered directly to consumers. Chicago-based Tovala – founded in 2017 – fuses ready-to-cook meal delivery with innovative kitchen technology. The company has experienced 10x revenue growth in the last 18 months.

Today Tovala announced a $30mn Series C, led by Left Lane Capital, just six months after a $20mn Series B raise. Jason Fiedler, Co-Founder and Managing Partner at Left Lane Capital, commented in a press release that, “The pairing of a meal subscription with a connected device has enabled Tovala to achieve a customer retention rate that is a step-function better than anything else we’ve seen in food delivery — in many ways similar to what Peloton achieved in a traditionally low-retention fitness industry.”

Left Lane Capital is a venture group focused on high-growth internet and consumer companies. The Series C funding round also includes Finistere Ventures, Comcast Ventures, OurCrowd, Origin Ventures, Pritzker Group Venture Capital, and Joe Mansueto.

The Peloton comparison is not far-fetched. In reviewing comparable metrics, Tovala’s customers engage with the product 32 times a month on average, while Peloton users average 25 workouts per month. Subscriber bases at both companies have growth over the last 12-18 months – 3x for Peloton, and 7x for Tovala. It is yet to be seen is if Tovala can match Peloton’s cult-level loyalty, with a monthly retention of 99% and an annual retention of 90%.

Similar to Peloton, Tovala’s focus is on creating a premium experience and content that is flawlessly integrated into their hardware and software. Each Tovala meal – created by a culinary team that hails from Noma, Top Chef and SpaceX – comes with a QR code that triggers a custom cooking cycle. Partnerships with Beyond Meat and Chef Graham Elliot enhance the culinary experience. And the company boasts that whether you’re a talented home chef or kitchen novice, you’re guaranteed an expertly cooked meal – because it’s been pre-calibrated for you. 

Tovala’s founder and CEO, David Rabie, says that the funds will support the company’s growth. He shares, “Our business is growing rapidly and we’re ramping up to open a new production facility, expand the team, improve the customer experience, and continue building a dominant food and consumer technology brand. A partnership with Left Lane Capital enables us to invest more deeply in these areas and position Tovala for greater success.”

There are skeptics of this type of rocketship growth. Peloton recently announced a goal of 100+ million subscribers, which, in perspective, would be equivalent to capturing half of all gym memberships worldwide. This ambition was critiqued by NASDAQ
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as unlikely for three reasons: retention declining as post-pandemic gym habits shift, new entrants in the at-home fitness market introduce competition, and the ability to reach economies of scale with a hardware-centric business model could impact the company’s unit-economics. For the moment, Peloton still dominates the space.

While it’s tempting to use other food delivery businesses as a reference point for Tovala’s potential industry impact, the company could be in the category-defining territory of subscription businesses such as Netflix
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, Stitch-Fix, and Dollar Shave Club. The current investor stack indicates a tech-focused valuation, which Peloton achieved with an $8.1 billion market cap at IPO in 2019. Peloton redefined fitness, making their proprietary bike a centerpiece of their business model. Tovala is positioned, bolstered by the pandemic acceleration of new eating habits, to learn from their success.

Sam Son

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