Tovala, the smart oven meal service with Peloton-like retention rates, raises $30m in Series C funding
The recent funding round also included previous investors in the business: Finistere Ventures, Comcast Ventures, OurCrowd, Origin Ventures, Pritzker Group Venture Capital, and Joe Mansueto.
Launched in 2017 by culinary-tech duo David Rabie and Bryan Wilcox, Tovala will use the latest round of funding towards improving the company’s ability to more efficiently reach customers across the US, said Rabie.
“We plan to open a new production facility to serve customers on the West Coast faster, expand the team, improve the customer experience, and continue building a dominant food and consumer technology brand,” Rabie told FoodNavigator-USA.
Tovala had a record-growth year in 2020 as consumers took to the kitchen and ate more meals at home.
The company, which shipped over three million meals last year including more premium options such as steak and seafood dishes (and is exploring potential brand partnerships with restaurants in 2021, said Rabie) saw annualized revenue increase by 10x in the past 18 months and increased its employee headcount by 40% in 2020 to support the growth.
“Despite the pandemic, weather disasters, and a range of external challenges, we focused on delivering tens of thousands of meals each week to households that depended on our services,” said Rabie.
A staple in the kitchen
To operate the Tovala countertop smart oven, users must scan a Tovala meal purchased through the company’s meal subscription plan or nearly 1,000 brand-name grocery items (e.g. Kashi and Amy’s) compatible with the Scan-to-Cook technology. Once scanned, the oven will automatically set the optimal temperature, cooking time, and function (steam, bake, broil, toast, or reheat) to perfectly cook the meal, says Tovala.
Because each meal requires one minute or less of prep time (no washing or chopping) and no preheating, users can have a home-cooked dish ready in 20 minutes or less, according to the company.
Priced at $199 (down from $299) and a subscription food delivery plan with meals starting a $11.99 each, Tovala is an investment for most consumers. But according to Tovala, customers are hooked on the device once they introduce it into their daily routines interacting with their Tovala Smart Oven an average of 32 times per month, making it a kitchen staple.
By taking even more time and effort out of the meal-time equation, Tovala has pulled in strong retention rates suggesting that customers see the value proposition pretty quickly.
“The pairing of a meal subscription with a connected device has enabled Tovala to achieve a customer retention rate that is a step-function better than anything else we’ve seen in food delivery — in many ways similar to what Peloton achieved in a traditionally low-retention fitness industry,” said Jason Fiedler, co-founder and managing partner at Left Lane Capital, which has invested in well-known DTC businesses including meal kit company Hello Fresh and Farmer’s Dog, a fresh dog food delivery service.
Tovala is also serving a “deep-seated consumer need” of meeting the dual demand of convenience and quality, which competitors in the food delivery service category haven’t completely addressed, said the company, who markets itself towards “insanely busy people.”
“While Tovala can help anyone who wants to eat well with limited time, our loyal customers include time-stretched working couples, busy families, empty nesters and solo diners. We’re uniquely positioned to serve people who crave fresh, home-cooked meals without the time or work typically required,” said Rabie.
“After growing 10x in the past 18 months, launching our first national TV ad campaign, and introducing more than 400 new meals to our menu, we feel bullish on the year to come in terms of sales and subscriber growth.”
