Investors tend to avoid food companies.
At Sherpa Ventures, we’ve spent our careers as investors seeking out business models that: Require minimal capital expenditure, Facilitate rapid scaling, Address a large market, Support robust margins, and Are defensible against competition.
Most of the great technology companies — think Uber, Airbnb, and Facebook — check all five boxes. And while traditional food businesses, and especially restaurants, may address large markets, they fail on all other counts.
Over the last several years, a new wave of technology-enabled food businesses has emerged. Led by Munchery (founded in 2011), these companies look very different from their predecessors in one important way: they only do delivery.
Over a week ago, Munchery announced its Series C of $85 million co-led by Menlo Ventures and Sherpa Ventures (the largest round in its space) to expand this model to many more cities.