Power Supply — Come for the food. Stay for the values

Few things if any are more important than food. As both fuel for life, and also the social basis of modern civilization, it’s no surprise then that the food sector has grown into a multi-trillion dollar global industry. And, with the rise of mobile and mass-personalization, it’s increasingly the target of Silicon Valley-style innovation.

But, while the size of the opportunity is undeniable, I’ve recently found myself reluctant to look at venture deals in this category. For context, I’ve looked at perhaps hundreds of food-tech companies over the last decade, from my time acquiring and managing Urbanspoon under IAC, to more recently since returning to the venture world. (I’m also a closet foodie with a secret desire to help feed the world a little bit better.) But, as much as I’ve wanted to find the next golden food business to back, it’s become ever clearer the more companies I meet just how difficult it is to assemble the right team and address the right opportunities in this arena.

To my pleasant surprise, this line of thinking flew out the window recently when I met with a team of seasoned operators who impressed me with their ability to merge true supply chain innovation with the kind of mission-driven ethos that can’t be faked and I believe is absolutely essential to success in this category.

That team, Patrick Smith, Jeff Kelly, & Robert Morton, are the founders of Power Supply, a wellness-oriented ready-to-eat meal company headquartered in DC. I’m proud to announce that Upfront is leading Power Supply’s $5 million Seed round.

Power Supply has created a marketplace connecting local chefs and consumers seeking high quality compliant meals (e.g. gluten-free, paleo, vegan, diabetic, and dairy free, among others). The product has quickly become a favorite of active professionals — yogis, crossfitters, health club members, boutique fitness devotees, and professional athletes — who are committed to eating with health in mind, yet still want great tasting food, and find it very hard to sustain this lifestyle on their own.

What stood out from our earliest interactions was the value system that is reflected in everything from the employees the company hires, to the meals it offers, to the drivers who make up their supply chain, to the members who subscribe to the service. Power Supply treats food as medicine, both for the body and the soul. It is the anchor that powers an upward spiral in life.

But, as much as I believe this higher purpose is what’s missing from many of the purely convenience-oriented startups in the food-tech category, it doesn’t mean much if not paired with a compelling underlying business. Fortunately, Power Supply has the goods:

• Customer Acquisition
  Power Supply utilizes a targeted acquisition approach, working hand-in-hand with fitness trainers, nutritionists, doctors, and corporate wellness programs who recommend the service to their clients as a key element to living well. Power Supply’s meals become, in essence, a “food prescription” for the lifestyle these influencers are trying to support in their clients. This approach has produced exceptionally low acquisition costs, while also driving desirable repeat behavior.
• Capital Efficiency & Scalability
  Power Supply’s marketplace model allows it to serve a diverse set of food products that satisfies many different lifestyles and keeps customers’ tastebuds engaged. This approach also eliminates the need to build out costly centralized production, making this model highly scalable relative to other market competitors. On the demand side of the marketplace, Power Supply collects orders in advance each week (the vast majority customers repeat multiple times a month) and delivers meals twice weekly allowing for cost-neutral fulfillment — something nearly unheard of in the era of “Uber for X.”
• Technology
  Power Supply uses technology to support a wide range of business challenges from meal personalization, to cold chain management, to support for their influencer and chef channels. Technology allows the company to both maintain and scale quality in one of the most capital efficient models I have encountered.

The food industry is on the cusp of disruption at the hands of mobile, data personalization, and changing consumer preferences. Today, some 40% of the US adult population ascribes to a specific diet or food value system (e.g. gluten free, paleo, vegan, vegetarian, low sodium, etc.).

I fully expect that in the years to come, when consumers are asked, “What food companies can’t you live without?,” Power Supply will be at the top of that list for many. Beyond just offering delicious, healthy food without the usual hassle, I believe this because Power Supply becomes a key part of their customers’ identity and lifestyle.

The combination of these factors has propelled Power Supply to over 1 million meals served. The company is currently live in multiple markets (greater DC/MA/VA and greater-Los Angeles, with San Francisco in Beta), with plans to greatly expand availability in 2016.

Finding success in the unforgiving food category will demand that Power Supply continue execute every single day. But the company is clearly off to a tremendous start. I could not be more honored to support this team and this mission.