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BGF-backed Gousto becomes UK’s latest tech unicorn

BGF News 02.11.2020.

BGF has today announced the closure of its fifth funding round in Gousto – the UK’s leading recipe box provider. The latest investment, worth £25 million (US $33 million) of new equity, was made in partnership with existing investor Perwyn. It has led to a valuation in excess of US$1 billion for the business, which has now become only the fourth UK company in 2020 to achieve ‘Tech Unicorn’ status. It follows hot on the heels of Synk and fellow consumer-facing businesses Gymshark and Cazoo.

Just 8 years since launch, Gousto joins an elite group of 19 venture-backed UK businesses, including the likes of Deliveroo, that have achieved a valuation of at least US$1 billion.

The new equity funds will add additional growth capital to Gousto’s own positive cashflow and is in-line with the business’ strategy, of at least tripling capacity by 2022.  During this period, there are plans to open three new customer fulfilment centres and create over 1,000 new jobs. The company’s second fulfilment centre in Lincolnshire is scheduled to go live before the end of 2020 and the development of centres three and four are being brought forward to meet the strong ongoing customer demand.

Stephen Welton, Executive Chairman at BGF, said: “We’ve worked with Gousto since 2015, delivering multiple rounds of funding over the last five years. We’re thrilled to have supported a business that has grown from an early stage venture to a market-leading scale-up in the highly dynamic meal-kit industry. This latest investment round is reflective of our belief in the sheer size of the market opportunity as well as the management team’s exceptional ability to deliver on its plans and to navigate the complex challenges and opportunities of 2020.”

Gousto is the global leader in automation technology within the sector and all of the fulfilment centres will utilise the Company’s proprietary algorithms which maximise speed of pick, daily volumes and pick accuracy, whilst minimising cost and food waste. This enables Gousto to offer a winning customer proposition; providing the most recipe choice with over twice as many recipes as its nearest competitor, for the best value, delivered directly to customers’ doors in the quickest time.

This is what has led to Gousto’s rapid success. Revenues for the three years ending 31 December increased sixfold between 2016 and 2019 and growth has remained strong with revenues for the first half of 2020 surpassing the £83m (US$108m) reported for the whole of 2019. Topline growth, combined with operational gearing has enabled Gousto to reach profitability faster than many leading tech peers. Gousto has been profitable since Q4 2019 and expects to generate a significant profit in 2020.

Having founded the business at the age of 26, Timo Boldt, Founder & CEO of Gousto commented: “Achieving tech unicorn status and joining the ranks of those elite companies that have attained a billion dollar valuation is a proud moment for the entire Gousto team and all of our shareholders but we are still only just getting started. The market opportunity ahead of us is vast, as changes in consumer behaviour drive permanent change through the entire grocery market.

“Our obsession with technology enabled us to scale our operations at speed in the first half of the year to meet an unprecedented and rapid increase in demand, with monthly meal deliveries doubling from 2.5m in January to 5m in June. The latest £25m fund raise will enable Gousto to scale further and faster, triple capacity to serve more families during these difficult times, ensure the safety of our teams and create jobs across the entire business. Gousto’s success is rooted in its absolute focus on delivering for its growing number of new and loyal customers the widest choice, the best value at the greatest convenience.”