Good Eggs’ latest funding round shows how a strong mission and great execution can turn a company around.
When Index first invested in Good Eggs in 2014, we bought into an exciting new concept: bringing the farmer’s market to your home. Fast forward four years, and the company has gone through an incredible journey — from high flyer, to near bankruptcy, to back on top. Today, Good Eggs is announcing an exciting milestone - a $50M round of funding led by Bill Gurley, one of the investors we respect the most in the VC world.
The Good Eggs journey has had some unusually difficult moments. Though it started with a great idea, talented founders, and strong backers, including VC firms like Sequoia, three years down the road the business began to stumble. The model they were operating under — as a farmer’s market with limited grocery inventory — could not scale. The company had been aggressively pursuing growth by trying to serve four cities, was overstretched, and started to run out of money. Its momentum was running out, and major investors began to pull out.
It looked like the company was about to go under - and as one of its primary investors, here at Index, we faced a big dilemma. We had to decide whether to walk away with some of the other investors, or keep fighting. We chose to double down, brought in a new, transformational CEO, and extended fresh capital. Other firms also came to the table, including a few highly respected angel investors. We kept fighting because we had a strong conviction in the original vision, were excited about Good Eggs’ new leader, and wanted to do the right thing for the company’s loyal customers. And while the beginning was a bit rocky, the bet quickly began to pay off.
I attribute their success to three factors: expanding from a specialty food delivery company to a primary grocer who solves your full food week; staying true to their promise of delivering absurdly fresh groceries to our homes; and the commitment and meticulous execution of their CEO, Bentley Hall and the Good Eggs team.
Good Eggs is now a thriving company loved by thousands of foodies and busy families alike who see it as nirvana for the easiest way to feed their household and stock the fridge with fresh, local groceries, meal kits and alcohol. The company has never been in better shape: the financials are strong - on target for a continual doubling of revenue, along with a transformational shift in margins; they offer a complete but curated assortment, with 4000+ SKUs, and same day delivery, and they have a fast-growing following of loyal supporters.
The new CEO, Bentley Hall, turned out to be the perfect person at just the right time. He was humble enough to take a few steps backwards, and from there he knew it would be better to grow the business methodically and incrementally rather than trying to take over the world, Silicon Valley style. He put Good Eggs back on the right path, clearing out the excesses that come with early big investments and hiring a strong, experienced team. Most importantly, Bentley and his team stuck to that original mission and stayed true to what Good Eggs wanted to achieve.
We have many members of that team to thank, including co-founder and CTO Alon Salant, Tess Fruge, Jamie Nessel, Betty Fletcher, Anne Mercogliano, Angelica Sullam, Jana Pastorkova, Michael Kebbekus and Elissa Chandler. Without their expertise and commitment we couldn’t have gotten this far.
The online food delivery market is one of the largest in the world, and predicted to be worth $100bn market by 2025, according to Nielsen. But the experience is often poor for consumers, dominated by low-quality produce in a battle to the bottom for price. Even Whole Foods, once a powerful advocate for local suppliers and quality fresh produce, has now been Amazoned, squeezing prices and pushing margins that add pressure further down the supply chain. It’s a tough time to be a producer.
Thankfully, Good Eggs is supported by many thousands of loyal and compassionate customers and suppliers who all believe in the company’s values, and in a mission that really matters. It’s a mission that sees Good Eggs committed to help grow and sustain local food systems, as well as bring delight to its customers’ dinner tables.
And above all, it’s incredibly exciting when your Good Eggs order arrives, beautifully packaged and prepared and, most important, fresh from the very best producers in California. The future of Good Eggs looks delicious.
Published — May 15, 2018