The encyclopedia · Finance & Accounting · Financial decision · 2015–2018
Chef'd had Campbell and Smithfield backing — it still ran out of cash in a day
Chef'd, the meal-kit startup backed by Campbell Soup and Smithfield Foods, shut down without warning on 16 July 2018 when its next financing fell through.
Chef'd · 2018-07
What happened
Chef'd launched in 2015 in El Segundo, California, selling recipe kits with pre-portioned ingredients — a competitor to Blue Apron and HelloFresh in the meal-kit boom, with a difference: partnerships with big food brands, and investment from Campbell Soup Co. and Smithfield Foods alongside venture capitalists.
On 16 July 2018 chief executive Kyle Ransford told staff in a memo that the company was closing that same day. Hundreds of workers across the El Segundo headquarters and the Brooklyn warehouse were laid off at once. Ransford blamed 'setbacks in financing' caused by 'unexpected circumstances': the company had burned through its cash and the next round of financing never arrived.
Nine days later, on 25 July 2018, True Food Innovations, a Newport Beach investment firm, bought the brand name, plant and equipment — from Chef'd's lender, not from the company. The three-year-old startup with two of the biggest food companies in America behind it ended as an asset sale.
Why it happened
- Meal-kit economics ran on thin margins and heavy spending; Chef'd burned its cash before reaching scale.
- The company lived round to round — when one financing fell through, there was no reserve.
- With the lender in control, the end was an asset sale within nine days.
The lesson
Chef'd had Campbell Soup and Smithfield behind it and still closed the moment one financing round fell through: with no cash reserve, the shutdown was announced for the same day.
Aftermath
True Food Innovations bought the brand, plant and equipment from Chef'd's lender on 25 July 2018; customers' orders stopped with the shutdown.
Sources
- Supermarket News, 17 July 2018 — As funding dries up, Chef'd shuts down (CEO Kyle Ransford announced in a memo that the three-year-old company was closing the same day, 16 July 2018; all staff terminated; backed by Campbell Soup Co., Smithfield Foods Inc. and venture capitalists; founded 2015; shutdown blamed on setbacks in financing due to unexpected circumstances after the company burned through funding)
- Los Angeles Times, 25 July 2018 — Newport Beach investment firm buys defunct meal kit company Chef'd (shut down 16 July 2018 via email from founder Kyle Ransford; hundreds of workers laid off; True Food Innovations of Newport Beach, run by Alan True, bought the brand name, plant and equipment from Chef'd's lender; attributed to setbacks with financing; backed by major food companies including Campbell Soup Co.)
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