Tovala started as a Kickstarter, and now it’s a multimillion-dollar business.
The Chicago company announced on Tuesday it raised $20 million in Series B funds, which it plans to spend on advertising and a slew of new hires. The 150-person company plans to bring on about 95 new people through the end of the year, including engineers, a growth marketer, a vice president of operations and more. Founded in 2017, the foodtech startup has since shipped more than one million prepackaged meals to young professionals and empty nesters across the United States, according to CEO David Rabie.
“You have a really big chunk of this country that is very reliant on food delivery and take out,” Rabie told Built In. “Generally that’s what our customers are replacing.”
Rabie said Tovala offers a cheaper, easier alternative to ordering delivery every weeknight. And unlike other meal delivery companies like Blue Apron or HelloFresh, Tovala customers can buy its $200 smart oven to bake its pre-packaged meals. Diners receive meals like BBQ chicken and miso salmon — Tovala’s menu changes weekly, individual meals cost $12 — scan the dish’s QR code, and the oven steams, bakes and broils the meals to completion in 20 minutes or less. In addition to cooking Tovala-brand dinners, the smart oven also recognizes the QR codes of more than 750 meals from popular grocery store brands and cooks items like Pop-Tarts to exacting standards.
“There’s no shopping, there’s no prepping, there’s no clean-up. That’s why it’s a very different business,” Rabie said. “We’re in the oven business and in the food business. We do it all ourselves.”
Rabie said that, as the COVID-19 pandemic persists, so has consumers’ reliance on pre-packaged meals. Since shelter-in-place orders began in mid-March, the number of subscribers to Tovala has grown 20 percent, he said, with average sales up about 15 percent. The company’s annual revenue has grown 300 percent since September of 2019.
The business plans to buy more growth, and invest the Series B funds in advertising on digital platforms like YouTube, Instagram and Reddit, as well as experiment on new platforms like direct mail or TV commercials. Tovala may also add another food production facility west of the Rocky Mountains, Rabie added.
At its current site in Chicago, the company has decreased the number of workers allowed in its production facility at one time and spread out its shifts to make sure workers could safely social distance while packaging food. Balancing Centers for Disease Control and Prevention recommendations while growing quickly has been a challenge, Rabie said, and Tovala is capping growth to make sure workers are safe.
“We’re leaving new customers on the table for a period of time, and that’s fine,” Rabie said. “It’s just a matter of what we’re prioritizing as a company.”
The Series B round brings total investment in Tovala to $41 million.
Finistere Ventures led the round, with participation from new investors Comcast Ventures, OurCrowd and Rich Products Ventures. Existing investors Origin Ventures, Pritzker Group Venture Capital, Crate & Barrel founder Gordon Segal, New Stack Ventures and the University of Chicago also participated in the funding.
