TemperPack raises $31m Series C to meet surge in appetite for food e-commerce

Meal-kit services saw takings double mid-April, with Blue Apron ’s shares rallying 400% after dipping to as low as $2 in March. This uptick in interest has been shared by firms that support the production and distribution of meal kits.

Sustainable packaging maker TemperPack is one such business. “We’ve been growing a lot organically but the Covid-19-related demand spike really, really accelerated that,” TemperPack’s director of marketing John Briney briefed AFN . “We had planned on doing another raise before all that happened, to invest in more machinery and capacity. But the buying interest signals coming from Covid-19 helped get us there.” The Richmond, Virginia-based startup made public a $31 million Series C this week led by UK-based Wheatsheaf Group , which is the investment arm of property giant, the Grosvenor Estate .

The backing comes only 19 months after it made public a $22.5 million Series B round led by billionaire Steve Case’s Washington DC-based firm Revolution Growth . TemperPack has worked with the business to develop a product that meets a variety of criteria around weight, sourcing, and recyclability.

The goal was to have a product that mimics the insulating aspects of extruded polystyrene, without its environmental consequences. Some of its newer clients come from the health and life sciences space, including UPS Healthcare , Illumina , and New England Biolabs , Briney explained.

The new financing will be used to gain TemperPack’s production capacity. A variety of food retailers and restaurants got under way exploring e-commerce options as the pandemic led to lockdowns and movement restrictions.

Chick-fil-A rolled out a meal kit in April, for example, while there has been a 40% jump in online grocery turnover so far this year. After lukewarm adoption rates among shoppers, roughly 80% of Americans placed an online grocery order during the height of the episode. Given all that, it’s easy to see how food packaging has became a hot commodity.

This could lead to a decline in meal kit turnover to earlier levels. “We are prepared for that,” Briney asserted. “Right now, everyone is pretty sold out. The buying interest for insulated packaging to help these food companies is really constrained so going back down is something everyone forecasts. But I think the system will have a new high watermark and a lot of people that did try food e-commerce will stick with it.” A bigger challenge facing TemperPack has to do with predicting the market and planning production accordingly.

It’s always a challenge of timing,” Briney explained. “We are more like a car business where we have to identify what we want to do, wait, build things, raise capital, and invest. There is always a lag time between where we want to be and where we are today.” Other sustainable packaging startups scored financing amid the pandemic. RWDC Industries, a Singapore-based maker of biodegradable plastics, secured $133 million in a Series B round co-led by Vickers Venture Partners , Flint Hills Resources , CPV/CAP Pensionskasse Coop , and Interogo Holding unit International SA.

Tech giant Alibaba invested $6 million in Hong Kong plant packaging startup Ecoinno , which is hoping to offer a “third way” between traditional, petroleum-based plastics and bioplastics produced from non-naturally occurring polymers.