The capital will be used to develop new products, increase production capacity and purchase equipment needed to increase production capacity.
According to CEO and co-founder Marc-Antoine Bovet, the company plans to “significantly” extend its North American subscriber base by the end of the year.
“This investment will allow us to remain at the forefront of breakfast trends and to offer our customers more products adapted to their lifestyle,” she said.
The Montreal-based producer contends it already delivers “hundreds of thousands of boxes of healthy breakfast” to its active subscribers monthly.
Each morning, consumers receive a choice of two granola mixes or gluten-, lactose-, and nut-free vegan protein breakfast bars.
The granola is made from organic seasonal ingredients – purportedly “flavors not generally found on supermarket shelves”, said the company. For example, June offerings include Pomegranate & Cashew and Pineapple & Coconut granola.
Products range in price from C$10 to C$13 per SKU and the minimum monthly charge for breakfast is C$20 (shipping included).
More than just money
While the company will benefit from the cash, CFO and co-founder Pierre-Luc Laparé noted that assistance from investors with strategic expertise in marketing, public relations and food distribution will aid Oatbox achieve its ambition more rapidly.
“Our investors bring us much more than just monetary support. We now benefit from the expertise of a group of mentors with complementary skills who guide Oatbox’s success,” he said.
“This is a significant agreement that aims to improve the competitiveness of our company in the breakfast market.”
The resounding meal kit category
The seed funding comes as the convenient meal kit category is booming, especially in North America.
According to Erik Thoresen, principal at market researcher Technomic, the global meal kit market is expected to top $10bn by 2020.
Demand is particularly strong in North America, which accounts for almost 40% of the global market.
He said growth is fueled by growing consumer acceptance of the subscription service model, as well as a strengthening food culture within the mainstream market.
This has enticed many established and new investors to jump on the bandwagon.
Earlier this month, Hollywood actress Gwyneth Paltrow and tennis star Serena Williams were among the investors in Daily Harvest, a US company delivering oats and frozen smoothies.
This followed Campbell’s Soups’ $10m investment in meal kit startup Chef’d, which was hot on the heels of Unilever’s (and other investor's) $52m funding in organic meal kit company Sun Basket.
Sun Basket reported a massive 1,300% sales growth in 2014, adding $124m in annual revenue.
And, most recently, Nestlé has acquired a $77m stake in US healthy ready meals group, Freshly.
Oatbox for breakfast and business
Oatbox co-founders Laparé and Bovet, both graduates of Montreal’s Ecole des Hautes Etudes Commerciales (HEC), started an online golf-equipment seller company, Golf Avenue, over a decade ago.
They founded Oatbox with two other partners, Laurent Laferrière and Jean-François Kabbani, in 2014 to answer the call to “recreate that excitement with another start-up”.
While several other food kit delivery companies provide dinner and lunch, they saw a gap in the market for breakfast.
In April 2017, the company added a corporate offering to its services. Oatbox for Business is a service for companies to offer their employees breakfast.