Apeel hits $2B valuation with $250M investment

Dive Brief:

  • Apeel has raised $250 million in Series E funding led by existing investor Temasek, the company announced on Wednesday. The latest investment, which included Katy Perry, Andreessen Horowitz and Mirae Asset Global Investments, brings the company’s total funding to more than $635 million and a valuation at over $2 billion. 
  • Apeel will use the funding to increase the availability of produce using the company’s invisible, edible “skin” that extends shelf life. The money will also be used to create new supply networks, ramp up retailer partnerships and boost data and insights offerings, including evaluating potential acquisitions. 
  • In recent years, food manufacturers have ramped up efforts to reduce food waste in their operations. In September, major companies, including Mondelez, Nestlé and PepsiCo, committed to cutting their waste in half by 2030.

Dive Insight:

With more customers now relying on a worker to pick out their online orders, there’s been greater emphasis on the quality of fresh produce offered by grocers. The increasing demand for sustainable, fresh products fueled Apeel’s growth spurt last year and speaks to this large investment haul. 

“2020 was a breakout year for us … We built the scale aspect of the company in the middle of COVID,” said Apeel’s Chief Financial Officer Bill Strong.

During that time, the company started branding produce with its edible skin with an Apeel label to boost brand awareness, Strong said, noting the marketing efforts will continue to grow. This year, it made its first acquisition, buying machine learning company ImpactVision in May. The purchase combined ImpactVision’s hyperspectral imaging technology with application systems that suppliers use to quantify the freshness of produce, complementing Apeel’s added protective layer, which slows the rate of water loss and oxidation for fruits and vegetables.

With this latest round of funding, Apeel plans to grow the supply network it has created with suppliers and retailers beyond the 30 it currently has across eight countries. As part of the announcement, Apeel said a new partner, citrus distributor AM Fresh, will help the company co-create its supply networks. By the end of 2021, Apeel aims to add 10 more supply networks across the U.S., Canada, Mexico, South America and southern Europe, Strong said.

Apeel also said it may use the latest funds for more acquisitions, particularly ones that could help it expand its data capabilities, grow its understanding of external and internal qualities of produce, and enable the company to label items with a “Best If Used By” date and nutritional content, Strong said. 

In terms of working with retailers, Apeel, which has 40 retail partners, is seeing a growing interest in its offerings from online retailers, Strong said. Grocers, in general, are facing growing pressure to address food waste as the industry takes a more robust approach with sustainability efforts. Some, like Hy-Vee, Meijer, Tops and The Giant Company, have turned to Flashfood, an app that lets shoppers buy food nearing their sell-by dates, while others, like Heinen’s and WinCo Foods, use Afresh, an artificial intelligence-powered platform designed to optimize fresh food for grocers. 

Apeel also recently debuted a subscription component for FruitStand, its direct-to-consumer model for small-scale farmers. Starting at $36 per month, the membership gives a 15% discount on certain offers, member-only live chats and events, free shipping on monthly orders and more.

“It’s not a major focus of Apeel at this point,” Strong said about FruitStand. “Still in very early pilot mode, but we do believe that long-term, being able to showcase that we can work with the small farmers and actually provide that produce to consumers directly to their doorstep, there’s value in that.”

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