Food delivery service Woop becomes most well-funded start-up under equity crowd funding
Gourmet dinner delivery service Woop (World On Our Plate) has closed off the most successful equity crowdfunding by a New Zealand start-up this week, raising its target $800,000 days earlier than planned.
The offer, launched after the Auckland-based start-up was just four weeks old, attracted 100 investors who gained 42% of the company. It launched the offer with a number of private investors putting in $300,000 and raised a further $500,000 from the general public on the same terms and conditions.
Woop provides three meals a week to subscribers and is a new rival to home delivery service pioneer My Food Bag, which two years after launch has expanded into Australia and grown revenue to more than $40 million annually.
Woop founder and chief executive Thomas Dietz said the fundraising showed the strength of its proposition and the public's appetite for the business model. The capital is being used to help grow staff numbers, expand its reach beyond Auckland to Wellington and then other urban centres around New Zealand, and develop its meal range.
The equity offer said food and grocery home delivery is 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 this year.
Mr Dietz said the business was already achieving run-rate revenue of $500,000 a year.
The Parisian foodie entrepreneur formerly worked for beauty giant L'Oreal and in 2012 founded and remains the majority shareholder in ready-to-eat French food production business Tomette, which is stocked in a number of supermarkets.
Snowball Effect co-founder Josh Daniell said the average raise on his platform was $1 million but the Woop offer was the most raised for a start-up on any platform since equity crowd-funding was introduced last year. All offers are restricted to raising a maximum of $2 million under the legislation. Only two have achieved that much on Snowball Effect so far – Invivo Wines and Punakaiki Fund.
Daniell put Woop's success down to having a great board, which includes lawyer Jane Hunter as chairwoman, an experienced executive team, and a founding entrepreneur who has a track record in a food venture.
"It's rare for a start-up to have that structure in place," he said. "The business model is also one that has worked in New Zealand with My Food Bag, which has a similar model."
BusinessDesk receives funding to help cover the commercialisation of innovation from Callaghan Innovation.