Recipe Kit Subscription Service Gousto Raises $2M To Keep HelloFresh Out Of Its Kitchen

Gousto, the UK recipe kit subscription service that competes with Rocket Internet’s HelloFresh, and Housebites (post-pivot), has raised $2 million in new funding. The investment was led by London VC MMC Ventures, with participation from existing backers, including Angel CoFund.

Gousto says the additional capital will be used to further strengthen its product, and to “fast track” the business — a business that I would imagine is quite capital intensive. Subscribers are sent three recipes per-week along with the required fresh ingredients so that they can get busy in the kitchen. Scaling the delivery of perishable goods isn’t quite the same as moving around bits and bytes.

The startup first pitched for funding on the BBC show ‘Dragons Den’, only for the dragons to declare themselves out. Shortly afterwards, however, Gousto announced it had raised £500,000 from unnamed food industry folk and Angel CoFund. With today’s new round, it says its total funding now sits at “over $2.5m” (the sums get slightly muddy when currencies keep switching with each announcement).

To add some context, last December HelloFresh announced new funding, which TechCrunch pegged at $10 million, followed by another $7.5 million this September, though the service isn’t just targeting the UK, but has also launched in the U.S. and a number of other, mainly European, countries, so it obviously needs more cash to fuel its international ambitions.

Meanwhile, UK competitor Housebites, which has reinvented itself several times, looks like it’s raised significantly less funding, too, though its backing from EC1 Capital, Michael Birch (founder of Bebo), and Steve Pankhurst (founder of FriendsReunited) remains undisclosed.

In a canned statement, James Carter, Gousto Co-Founder, sums up the scaling challenges of a recipe kit business like Gousto: “Whether you have 100 or 100,000 customers, you need to have great infrastructure in place – from sourcing, logistics, product development, tech, to fulfillment. Building this infrastructure now puts us in the pole position to grab a sizeable share of the £18bn online food market.”

To that end, Gousto says it’s currently delivering 26,000 meals per-month, and that part of the new funding will be used to “build up Gousto’s team of chefs and nutritionists; improve the recipes; and strengthen relationships with the farm suppliers and producers.”