Waterman Capital invests in My Food Bag ahead of IPO, plans Australian exit

Wednesday 19th October 2016

My Food Bag Holdings, New Zealand's biggest home delivery meal kit service, has a new major investor, Auckland-based Waterman Capital, and plans to become a publicly listed company focussed on its home market.

In May this year, the Auckland-based company said it was seeking expressions of interest from equity investors and had appointed PricewaterhouseCoopers to manage approaches. Today at a press conference it said the process had "garnered a huge amount of interest" and Waterman would invest as it sets its sights on an initial public offering within the next three years and list on the NZX. The company declined to provide further details on Waterman's investment but said it will get three seats on the board.

My Food Bag was founded in 2013 by Cecilia Robinson, who is the company's chief executive alongside her husband James Robinson, and is fronted by celebrity chef Nadia Lim and backed by former Telecom chief executive Theresa Gattung and Saatchi & Saatchi chairman Kevin Roberts.

In May, My Food Bag estimated it was New Zealand's third-largest food retailer behind the country's two dominant supermarket chains, Foodstuffs and Countdown. It expected its revenue to rise to more than $135 million in the year ending March 31, 2017, and accelerate to more than $200 million in 2018.

In June, it launched Bargain Box, a cheaper option targeted at families. The business has also expanded its offerings to include lunchbox, dinner party and fruit as extras.

The service has more than 35,000 active customers across New Zealand and Australia but under changes announced today it will withdraw from the Australian market to focus on NZ.

Currently it makes 14,000 weekly deliveries, with a 120 percent annual growth rate. The company doesn't split out its New Zealand figures but Robinson says penetration lags behind her home country Sweden where one in four households have tried this type of delivery service. New Zealand has about 1.7 million households, according to Statistics New Zealand.

The company has had a number of unsolicited approaches from trade parties and venture capital investors since they launched. Robinson said they don't have a preconceived idea of how much equity they would like, or how much of a stake initial investors would want to retain, and wouldn't rule out publicly listing.

Last September, gourmet dinner delivery service WOOP (World On Our Plate), raised $800,000 on equity crowdfunding platform Snowball Effect in exchange for 42 percent of the company.

That equity offer said food and grocery home delivery was one of the world’s hottest new venture capital sectors, with over $1 billion invested in 2014, and already over $500 million in the first quarter of 2015.

In May, Foodstuffs, which owns the New World, Four Square and Pak 'n Save brands, said it planned to begin a national grocery delivery and pick-up service from October, beginning in the North Island.

Countdown launched click-and-collect from supermarkets in May, and expanded that to five bus, train and ferry terminals in Auckland last month as a six-month trial. It has offered delivery under its brand since 2010.

BusinessDesk.co.nz

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