NBA, NFL Players Invest In Catering Company Hungry’s Funding Round

Several professional athletes recently participated in a $10 million Series C1 funding round for Hungry, a food technology startup that primarily partners with chefs and restaurants to cater corporate dining and events.

Portland Trail Blazers guard Anfernee Simons, Seattle Seahawks linebacker Bobby Wagner, Baltimore Ravens linebacker Roquan Smith and Houston Texans tackle Laremy Tunsil were among the round’s investors. They joined other athletes and celebrities such as free agent football players DeAndre Hopkins and Ndamukong Suh, Chicago Bulls guard Lonzo Ball, actor Kevin Hart and rapper Jay-Z’s Marcy Venture Partners who previously invested in Hungry.

The latest round valued Hungry at $270 million, up from a $200 million valuation two years ago when the company raised $21 million in a Series C round. Hungry expects to generate $60 million to $70 million of revenue this year, up from $30 million last year, according to Grass.

The company also secured investments in the latest round from several venture capital firms, including Sands Capital Ventures, Motley Fool Ventures, Evolution VC Partners and GP Ventures.

Grass claimed the Series C1 is “the last funding round we’ll ever need” as long as the company can achieve its goal of becoming profitable for the first time by the end of the year. He added that Hungry is hoping to go public late next year or in early 2025.

“Given the broader environment, we were happy with (the valuation),” Jeff Grass, Hungry’s chief executive and co-founder, said in an interview. “I keep hearing step ups in valuations right now are almost unheard of. It wasn’t quite as big of a percentage increase as we’ve seen in our previous rounds, but it was still a nice healthy step up. We feel very fortunate and excited about it. It lets those new investors all get a good deal, too.”

Grass and brothers Eman and Shy Pahlevani founded Hungry in 2017 as a way for companies to offer affordable, quality food to their employees. The three had previously founded LiveSafe, a mobile safety platform that Vector Solutions acquired in October 2020.

Hungry launched in Washington, D.C., and expanded to four more cities over the next three years, generating multiple millions of dollars in sales, according to Grass. But when the coronavirus pandemic hit in March 2020, the company’s revenue plummeted because people were no longer working from their offices and shared meals were discouraged.

Over the following year, Hungry pivoted to creating an online events business where companies could hire chefs and have them perform cooking demonstrations for their employees as a fun, team-building exercise or for their clients as a way to entertain them. Hungry also got into the logistics and delivery space, partnering with meal preparation companies.

Today, Hungry is in 13 cities: Austin, Texas; Atlanta; Boston; Chicago; Dallas; Los Angeles; New York City; Oakland, Calif.; Philadelphia; Salt Lake City; San Francisco; Santa Clara, Calif.; and Washington, D.C.

Hungry generates most of its revenue from its core catering business with recurring daily or weekly lunches accounting for about two-thirds of sales and one-off events accounting for the remaining one-third. The company has about 500 chefs and restaurants on its marketplace, which local businesses can use to coordinate food for their employees. Most of the food is prepared by well-known local chefs who work out of licensed commercial kitchens and prepare healthy meals that cost about the same as or less than ordering from Panera Bread, according to Grass. Hungry last year acquired NatureBox, a healthy snacks company, so businesses can order snacks, as well.

Hungry does not plan on entering any new markets over the next few months as it focuses on achieving profitability. Venture capital firms and other investors are shying away from firms that tout outsized revenue growth but do not have a clear path to being profitable.

“The goal now with the state of the funding market is really about getting to cash flow positive and becoming profitable,” Grass said. “We’ve temporarily paused more new market launches in order to kind of prioritize (profitability), but as soon as we hit profitability, yes, we want to keep going.”

Grass added that Dallas, Houston, Phoenix and Seattle are among the cities where Hungry could expand to in the coming years. The idea is that large companies have offices throughout the U.S. and can use Hungry to coordinate lunches and events at all of those buildings.

Since the pandemic began, companies have increasingly been allowing their employees to work remotely or in a hybrid environment, creating fewer people working from the office, a trend that many think will be permanent. For instance, only 49% and 47.6% of employees in 10 large markets worked from their offices for the week through May 24 and May 31, respectively, according to Kastle Systems, a company that installs security systems in office buildings.

Still, Grass said companies are starting to have more employees work from the office, and providing food such as that offered by Hungry can help encourage attendance. Google last week cracked down on employees who did not comply with the mandate to work from the office three days per week, while Meta this month asked employees to come into the office three days per week, as well.

“Companies are starting to stiffen their resolve on getting people back into the office,” Grass said. “They’re trying to encourage them more, and so we’re seeing food being a really effective tool. If you’re not going to require them, food is a great incentive to get people to back to the office.”