Melbourne-based Make Out Meals is looking to take its unique spin on meal kit subscription services to more Australians after hitting the minimum target of $300,000 in its equity crowdfunding raise yesterday.
While the company can still raise up to $1 million on crowd sourced funding (CSF) platform Birchal, Make Out Meals is now guaranteed to walk away with some capital and a bunch of new investors supporting the meal kit platform’s journey.
Founded by Billy Green in the midst of Melbourne’s first lockdown when venues in the city were closed to diners, Make Out Meals partners with local chefs to give customers high-quality ingredients and restaurant-level recipes.
Green hopes this approach will disrupt the $300 million industry dominated by foreign-owned heavyweights like Marley Spoon (ASX: MMM) and HelloFresh, with this latest serving of capital enabling the company to push deeper into New South Wales and the Australian Capital Territory.
The founder says he has been blown away by investor support, with Make Out Meals having secured $371,740 from 92 investors during the private round of the Birchal raise at the time of writing.
“This comes on the back of our biggest week ever in sales for Make Out Meals. It cements our belief that we are delivering a unique business model that is needed in the meal kit subscription service industry,” Green said.
“The biggest buzz I got was realising that over 50 per cent of investors are our regular customers. This was why we did an equity crowdfunding raise, so our most loyal customers can share in our success. They truly believe in us and they want us to grow and prosper so we can offer the best meal kit service in Australia to more people.
“We smashed our private investment round and are now overfunding, which will continue until we hit $1 million. Our public investment round will kick off today.”
Making the most of lockdowns for Melbourne’s top chefs
Since launching in September 2020, Make Out Meals has partnered with close to 20 restaurants on a continually-evolving menu, including the likes of Entrecote, Mamasita, DOC, Oasis Bakery and Fancy Hank’s.
The company’s initial goal was to support Melbourne’s restaurants during COVID-19 lockdowns, and give those stuck at home something nice to eat.
“It was an interesting time to start a business,” Green told Business News Australia.
“I didn’t get to meet a lot of our restaurant partners in person until we were out of lockdown; I was working with a lot of chefs virtually.”
Like its competitors, Make Out Meals sends subscribers ingredients and a recipe to follow. But by partnering with local restaurants and top chefs, Green says his customers get a better overall experience.
“The restaurants not only provide a recipe, but a lot of the the time they’ll provide [restaurant-made] ingredients too. So you might get authentic Thai curry paste or a smoked brisket - something really special,” Green said.
“[The chefs] put their name to it, so they make sure the quality is up to their standards.
“For the restaurants it's a whole new opportunity. They get a commission for every recipe sold, but even bigger than that, they get exposure to a whole new range of customers.”
Green said this exposure element is heightened by the fact that Make Out Meals currently delivers all over Victoria, meaning those living outside of Melbourne can replicate a CBD-based restaurant experience from home.
“It really goes two ways - we get a lot of customers coming to us because they can’t get to the restaurant, but similarly a lot of our customers might try a restaurant for the first time through us and then go to the restaurant to get the full dining experience,” Green said.
The Birchal raise will assist in Make Out Meals’ expansion and marketing efforts, moves done on the back of 20,000+ meals delivered to date and revenues tripling year on year.
“We’re seeing some pretty massive growth, and we’re expecting that to continue,” Green said.
“At the moment we have customer retention rates at 70 per cent - so more than 70 per cent of our revenue is coming from repeat customers.
“The good problem that we have is that we need to reach new customers and get them into that cycle. We really haven’t spent anything on marketing to date, it’s pretty much been all organic.”
With the company’s expansion into NSW and ACT underway, Green hopes to tackle Queensland next, with South Australia to follow in the next 12 months.
“We’re setting up new warehouses around Australia in that same period to support the growth,” Green said.
“We’re also in the process of building a new website as well, which will support revenue growth and different product lines and offerings.”
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