Oprah-, Katy Perry-backed Apeel Gains $250M in Series E Funding

Apeel, a company on a mission to reduce food waste by using plant-based technology to prolong the freshness and nutritional attributes of produce, has received $250 million in Series E Funding, bringing its total funding, since its launch in 2012, to over $635 million with a valuation of $2 billion.

New and returning investors include Mirae Asset Global Investments, GIC, Viking Global Investors, Disruptive, Andreessen Horowitz, Tenere Capital, Sweetwater Private Equity, Tao Capital Partners, K3 Ventures, David Barber of Almanac Insights, Michael Ovitz of Creative Artists Agency, Anne Wojcicki of 23andMe, Susan Wojcicki of YouTube, and singer Katy Perry. 

The funding comes just over a year since Apeel secured Series D funding of $250 million, with the support of celebrities such as Oprah Winfrey and Perry.

What’s the investment attraction with the celebrity set and what’s at stake if Apeel succeeds in its sustainability mission? WGB asked Apeel Chief Financial Officer Bill Strong in a recent phone interview.

“We can potentially solve world hunger,” said Strong, who along with Apeel wants to change the way the world eats. “We are an environmental strategy in a box, and I think that resonates with a lot of people, including celebrities.”

Apeel’s plant-based protection allows for longer-lasting produce by using materials already found in the skins, peels and seeds of all fruits and vegetables. This protective extra “peel” slows the water loss and oxidation that causes produce to spoil, the company explained.

“The pandemic has completely shaken up food retail: People are increasingly buying their fresh produce online, while simultaneously expecting the best in terms of quality and sustainability,” said James Rogers, CEO of Apeel, in a statement. “We’ll use our latest funding to help our supplier and retailer partners offer a differentiated experience to their shoppers: high-quality produce that’s less likely to go to waste at home. By using solutions by nature and for nature, and in collaboration with food supply chain partners around the world, we can ensure people everywhere have a great experience with their fresh produce while increasing the sustainability of the global food system.” 

Regarding Goleta, Calif.-based Apeel’s string of capital infusions, Strong told WGB, that the capital Apeel raised over the past year built the base of a pyramid for the company across eight countries. Apeel produce is now in some 40 retail brands and thousands of stores across U.S. and Europe. With its new funding, the company plans to operationalize at least 10 additional supply networks by the end of the year.

“We want to do more and continue to move at a faster pace,” said Strong, who added that the company will continue to develop great products, co-create channels with retailers, increase product availability and look for strategic partnership opportunities with other tech companies.

“We’ve been shouting from the mountain tops for 10 years now on food waste, and what people are really beginning to talk about is that we don’t have a food shortage problem, we have a food waste problem,” he noted.

Online Solution

Among Apeel’s retailer partnerships, The Kroger Co., WGB’s Retailer of the Year, sells Apeel produce in 100% of its stores in the U.S. Apeel stickers on avocados, citrus and more at the Cincinnati-based grocer’s stores inform shoppers what longer lasting produce means.

The message is also communicated online. “The future of retail is fresh. There’s an intimate relationship between shoppers and produce, and freshness is the reason shoppers go to a particular store. Apeel helps address the challenge of shoppers continuing to buy more online," Strong said. 

Third-party delivery players such as online grocery platform Instacart say their biggest challenge is in fresh, noted Strong. These companies are eager to provide a better consumer experience with produce that is at its freshest when it reaches the consumer.

“If a consumer needs soft avocados for guacamole tonight, with our data insights, we have the ability to predict the best date for produce consumption,” Strong said. “We can predict brown streaks in the center of an avocado before the consumer gets it. We pick up a box of Cheerios and know down to the percent what’s in there.” Why can’t retailers and consumers do the same with produce? Strong asks.

Longer Lasting Produce

Fresher, longer lasting produce is better for the entire supply chain and the planet, noted Strong, who explains that different grocers are looking to solve different challenges with Apeel.

“Some retailers are looking to reduce the amount of produce they throw away, which has a direct positive impact on their margins if they do that. They’re buying less and selling more,” Strong said. “For others, they may have low shrink in an area but want to increase unit sales well. Apeel can do that by marketing directly to their consumer base the benefits of Apeel, which we’ve proven through data, increase sales in the category vs. non-Apeel produce.

“Some might want return shopper benefits,” he continued. “Having a positive experience with produce has proven not only to get people into the store but also has them purchasing more and coming back to purchase again.”

Similarly, every produce type has a different set of benefits, Strong explained. With avocados, consumers can have a perfectly soft and ripe avocado for a longer period of time at home. While with citrus, it can mean an extended shelf-life on a juicier piece of fruit. Apeel also provides long-lasting English cucumbers without wrapping them in plastic.

What’s Next for Apeel

“Really this capital raise doesn’t really change anything strategically for us,” Strong said. “It’s, how do we continue to provide more products to the market that delight our retailer customers and delight consumers on the other end? How do we build more supply networks that supply that produce to the U.S. and Europe? How do we add more categories?

“And how do we start to think about more acquisitions of technologies that we can plug into our technology stack that would enhance our ability to provide insights to the suppliers, supply chain, retailers and consumers on produce before it even happens?” Strong added.

Apeel, which in May acquired advanced imaging technology that essentially accesses the natural database inside of every piece of produce, including valuable metrics such as stage of ripeness, nutritional content and other indicators of quality and shelf life, will also use its funding to advance its data and insights offerings, including additional potential acquisitions.

With this latest funding, the company will continue to integrate advanced imaging technology into its application systems and make this data available to its partners, says the company.

“Longer term, there’s also the question mark around when Asia makes sense for us,” Strong said. “This capital raise will enable us to start thinking about Asia as a strategy. It’s a massive opportunity for Apeel.” Strong believes the company may be ready to expand into Asia in the next one to two years.

Since 2019, Apeel has prevented 42 million pieces of fruit from going into the trash bin, and up to 50% reduction in avocado food waste, Strong said. What’s more, 4.7 billion liters of water have been saved as a result of Apeel produce being consumed.

“How do we provide value to our partners providing value to our shareholders and our employees which in turn will provide a positive benefit to the planet? If we focus on that and providing long-term value to all of those stakeholders, we believe we’re on our way to really creating a more sustainable platform for the food system,” Strong said, adding that Apeel is on a mission to bring food waste to zero globally.

“If 1 in 9 people are going hungry and 1 in 3 pieces of produce are going into the trash, if we reduce that 1 in 3 to zero that means more produce can be consumed … and that will have real impact on the way the world eats,” he said.