Healthy Eating: Jumpstart Capital takes a taste of startup Menud
By Milt Capps
NASHVILLE's Jumpstart Capital has subscribed to the thesis that Menud Co. has honed through two pivots, which have left the startup positioned at the intersection of Celebrity role models for healthy eating, evolving Consumers and stressed-out Food retailers.
Vic Gatto, chairman of the Jumpstart Capital investment committee and CEO of Jumpstart parent Briovation, confirmed today that the minority investment of undisclosed magnitude came from the Jumpstart 2017 LLC fund.
In the wake of the transaction, Founder-CEO Neil Whitney, 34, told Venture Nashville he retains controlling interest in Menud Co. (menu'd), a Delaware-registered company.
As VNC previously reported, Whitney and co-founders Ned McPherson and Danny Watts invested $125K in the business at the outset.
Ft. Lauderdale-based McPherson remains a full-time member of the startup's 6-person team and is Head for the health-fitness sector, while Tampa-based shareowner and former CTO Watts now frequently works ad hoc with the company.
Head of Product Greg Wiley is based in Nashville, and the company has two offshore developers. Development will come in-house in 2018, said Whitney.
The company has accepted $380K in outside investment to date, including an early investment by Peter Demos, the Middle Tennessee restaurateur.
Whitney said about $225K of Menud's outside capital has come from individual Nashville area investors.
Whitney also confirmed that the company's current Seed raise remains open; and, that a Series A raise in the $1MM-$1.5MM range is likely in 2018.
The company began in 2015 as a more broadly positioned consumer platform for finding diet-specific foods. It shifted in mid-2016 to teeing-up "celebrity curated" restaurant offerings.
Then, about five months ago, Menud refocused on serving-up celebrity-curated meal plans for subscribers among each participating celebrity's fanbases, with strong emphasis on in-home preparation.
For the health-conscious, it's easier to plan for in-home dining than it is to satisfy one's needs at individual restaurants.
"The meal plan is the number one pain-point," which makes enabling meal planning and in-home preparation key -- particularly since decisions about what to eat for dinner are typically made after 4:30 p.m. each day, Whitney explained.
Whitney observed that tech-enabled innovation in support of healthy lifestyle choices has accelerated, just as consumer frustration with grocery shopping has risen, exacerbated in part by in-store promotion relying heavily on eye-level shelf and end-aisle displays of what are often less healthful products.
Simultaneously, grocery chains and other food-product purveyors are facing increased risk of disintermediation by online sales giant Amazon and others.
As a result, both Retailers and Consumers are turning to tech-enabled services to help them cope and achieve their personal or business goals.
The challenge facing grocers is particularly intense, as indicated by recent stories on Amazon's Top-5-By-'25 grocery strategy, Kroger's data/tech adaptation, and a lighter piece on broken grocery aisles from Buzzfeed.
By leveraging trusted Celebrity referrals for fans, Menud is drawing on the energy of the consumer "lifestyle" market.
Whitney said Celebrity fan referrals to the Menud platform have thus far proven dramatically more effective than other marketing channels, particularly social media such as Facebook, in which Menud invested a mere handful of dollars before dropping its experiment.
The Menud app is currently available only through the App store and a mobile-friendly Web app is slated for 2018.
Whitney characterized his company's series of strategy adjustments as "in-market pivots," adding "We just continue to wiggle into market fit."
The CEO emphasized, as he has previously, that the iterative nature of the Lean startup methodology he advocates is challenging, but it helps entrepreneurs ensure market fit and adequate control of the business.
He insisted that founders need to be tenacious, "scrappier" and "self-capitalizing" unless and until forced to look outside for money needed for major development or market-entry costs.
Menud has thus far enlisted "dozens" of celebrities and aims to have "40 to 70" aboard within 12 months, and ultimately as many as 150, said Whitney.
Each celebrity may introduce dozens of meals via the Menud platform, with a "meal" typically defined as an entre with two sides. The emphasis is on simple nutrition and enjoyment, not on esoteric ingredients or "experiential cuisine."
While much of its celebrity recruitment has been by direct pitches, Whitney said the company is increasingly working with some of the most influential go-betweens, which he declined to identify for publication.
Asked about the risk of negative celebrity publicity, Whitney stressed that the company maintains high standards with respect to affiliations, and he acknowledged that as, in other sectors, if circumstances render a contract "toxic" in any way, the agreement can be readily exited.
Fans are asked to pay monthly or annual subscription fees or access to Menud content. Celebrities earn a share of proceeds resulting from their fans' participation.
For this story, Whitney identified two NY-based companies -- Blue Apron, the grocery delivery service, and Plated, which home-delivers gourmet recipes and ingredients. Plated was recently acquired Cerberus-backed Albertsons Companies, a grocery and drugstore group.
Asked about an eventual exit, Whitney said it's early in the company's life, but acknowledged he views as plausible an eventual exit to a major grocery or health-related player among the most obvious options.
Both those industries are continually looking for assets that can be used to improve their relationships with consumers.
He said his company already seeks relationships with major employers, health care and insurance providers, and with grocery retailers and others, in an effort to spread the word about the potential health benefits of using Menud to plan healthy meals, while expanding the platform's user base via sponsored subscription packages and other offers. Menud does not plan to take advertising on its platform, he said.
Notably, as VNC reported last week, Briovation/Jumpstart have stated their interest in the Consumer/Retail facet of the Healthcare industry in which they concentrate. See related story here.
As he made clear in our 2016 article, Whitney said he believes that Nashville is a great Celebrity and Consumer testbed for his company, and he expressed no regret about having relocated here from techie-centered San Francisco. (His Linkedin, reflecting stints with Apple and Booz Allen, is here.)
Menud's advisors include San Francisco-based attorney Ryan Williams. For accounting, Whitney said Menud aims to sign with Knoxville- and Nashville-based PYA in the New Year.
Matt Littlefield, a deeply experienced wealth-management executive based in Boston, has also personally become an investor and advisor to the company, the CEO confirmed.
The Menud advisory board is also quietly coming together and will, in addition to Littlefield and previously reported Bay Area advisor Erik Ford, include a Food-sector tech executive whom Whitney did not disclose.
Having served in the U.S. Army, Whitney was eligible to participate in 2016 in the Bunker Labs Nashville accelerator for Veteran entrepreneurs.
He said the Bunker Labs experience was extremely helpful in Menud's efforts to make connections in the Entertainment and Healthcare sectors, as well as among other veterans, including some well positioned in venture capital firms.
He noted that in 2018 he expects to become "very, very very involved" in Bunker Labs leadership.
Whitney, his wife and their daughter reside in Davidson County. VNC
. last edited 1804 18 December 2017