Oisix ra daichi Inc., a Japanese meal-kit and organic food delivery service, announced plans to buy plant-based meal-kit company Purple Carrot, No. 874 in the Internet Retailer 2019 Top 1000.
Terms of the deal include an upfront payment of $12.8 million, with an earn-out potential of an additional $17.2 million through 2021, which means it could possibly earn more after the business is sold if terms of the agreement are met—but those terms were not fully disclosed. Purple Carrot’s headquarters will remain in Needham, Massachusetts, and its entire executive team will retain their roles.
The upfront payment amounts to just $2.8 million more than the $10 million that Purple Carrot has raised from investors since its 2014 founding, according to Crunchbase. That’s because despite high-profile moves, such as working with football player Tom Brady on its TB12 line of meal kits—a $78-a-week line of food modeled after his own diet—the retailer was never profitable, Oisix says. However, it does have 22,000 subscribers and generated $43 million in 2018 revenue.
The deal will position Purple Carrot within a significantly larger meal-kit company; the Japanese meal-kit retailer, on the other hand, says it generated about $580 million in revenue in 2018, growing 160% year over year.
“By partnering with this Japanese powerhouse, we’ll bring Purple Carrot plant-based meals to even more consumers and significantly increase the positive impact of our business well into the future,” says Andy Levitt, Purple Carrot’s founder & CEO.
This is just one of many acquisitions in the topsy-turvy meal-kit industry. Plated was acquired by grocery retailer Albertsons Inc. (No. 200) in 2017, Home Chef was acquired by The Kroger Co. (No. 17) in 2018, Munchery shuttered its operations and Chef’d was acquired by private equity group True Food Innovations.
“While meal kits have cooled in the United States, the trend has caught fire in Asia, where mega-cities offer high population density and cost of customer acquisition is significantly lower,” writes Sean Butler, a managing director at consulting and engineering firm LIDD and formerly Purple Carrot’s head of operations, partnerships, and business development, in a post about the acquisition.
In other ecommerce news:
- Venture company Scaleworks bought SearchSpring, a technology company that provides artificial intelligence-powered ecommerce search technology. It provides search and navigation technology to such retailers in the Top 1000 as women’s apparel retailer Lulus (No. 125) and razor retailer Blade HQ (No. 609). SearchSpring founder and CEO Gareth Dismore plans to leave the company. “After 11 years of operating independently as a bootstrapped company, SearchSpring will now have the backing of a team of technology veterans that share our passion for search, merchandising and helping brands and retailers succeed online,” Dismore says. Peter Messana will be the new CEO, leaving his position as chief operating officer at ecommerce services company GroupBy.
- Voice shopping tool VoiceSell raised $4 million in a seed funding round from Channel Mark Investments. VoiceSell enables online retailers to instantly add a voice agent to any existing online store. It uses natural language processing—a type of artificial intelligence that helps computers understand, interpret and manipulate human language—to enable voice on ecommerce transactions, allowing shoppers to browse, order and check out on ecommerce sites from mobile phones or without using a keyboard.
- Digital ecommerce agency CTI Digital acquired ecommerce services provider Nublue, which specializes in Magento ecommerce services. The U.K.-based companies aim to strengthen their ecommerce service offerings but will maintain their separate names, locations—although Nublue’s existing Manchester office with merge with CTI Digital’s Manchester office—and senior executives will retain their positions. Terms of the acquisition were not disclosed.