April 3, 2024
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FreshRealm raises $200M in region’s largest funding round of 2022


FreshRealm is headquartered in this building in downtown Ventura. (Tony Biasotti photo)

Ventura-based FreshRealm took a huge bite from the venture capital market on July 20, with the company announcing a $200 million funding round, by far the biggest this year by a company in the tri-county region.

Specific leaders of the funding round were not disclosed, but the company’s news release said it was “led by a premier global cornerstone institutional investor.”

FreshRealm, a provider of meal kits and packaged fresh food to national retailers, said that it will allow the company to pursue accelerated growth in what it calls a $30 billion market opportunity with retail partners. That includes expanding operations, innovating its meal pipeline and strengthening its supply chain.

“We’ve built the most sophisticated platform for fresh meals nationwide in partnership with retailers that represent about 10,000 retail locations across the country and over a million DTC [direct-to-consumer] consumers over the last year,” FreshRealm founder and CEO Michael Lippold said in a press release. “As the retail fresh meals category continues to demonstrate compelling growth, this funding will allow FreshRealm to bolster our existing end-to-end platform that supports elevated private label and branded meal assortments and fresh meals destinations.”

Last year, FreshRealm closed a funding round worth $32 million. The company has not disclosed its valuation.

FreshRealm started in 2013 as a subsidiary of Calavo Growers, a publicly traded Santa Paula-based produce distributor. In the third fiscal quarter of 2020, Calavo wrote down a $37.2 million non-cash loss on its investment in FreshRealm, and in February 2021, Calavo and Fresh Realm officially separated.

Their separation agreement called for FreshRealm to repay some or nearly all of its debt to Calavo if FreshRealm has a “success event” that values it at more than $100 million, such as a merger or acquisition, a private equity placement or an initial public offering. FreshRealm agreed to pay Calavo $10 million if it is valued at between $100 million and $230 million; $20 million if it is valued at between $230 million and $380 million; and $34 million if it is valued at more than $380 million.

FreshRealm founder and CEO Michael Lippold told the Business Times that Calavo has no remaining involvement with FreshRealm, and FreshRealm repaid Calavo before this latest venture capital round.

FreshRealm’s $200 million capital raise comes at a time of inflation and economic uncertainty that has led to a decline in the venture capital market.

According to CB Insights, a global private equity group that conducts research on venture capital spending, worldwide venture funding reached $143.9 billion across 8,835 deals in the first quarter of 2022, down 19% from the previous quarter.

In the tri-county region, only one company has raised more than $100 million so far this year, and no company has raised more than $200 million.

Not including Fresh Realms’ recent raise, 12 Central Coast-based companies have raised a total of $440 million this year, with seven companies raising at least $20 million. That’s well below the pace from 2021, when the region’s companies raised more than $1.7 billion over the full year, including seven raises of more than $100 million each.