DFJ Esprit invests in Graze

By July 16, 2009 4 Comments


I’m pleased to finally be able to let you all know that a week or two ago we invested in graze – an ecommerce company that delivers healthy eating by post. 

We think that Graze is a hot company because they are in at the beginning of what promises to be a very exciting market, they have a great product, the company has strong momentum, and (last but not least) a great management team.  To put some more flesh on those bones:

  • The market: food is a huge market (eating at work in the UK is around £19bn) and Graze plays on the trend within that towards healthy eating – a trend which has already spawned a number of successful companies including Innocent Drinks here in the UK
  • The product: through a mix of high quality ingredients and beautiful packaging graze’s product has really hit a sweet spot with consumers – check out what people are saying on Twitter, and more importantly the way they are voting with their wallets as evidenced in the chart below
  • The team: everything about the operations at graze reek of high quality execution – from the back end logistics, through the website front end to the customer acquisition processes everything is done well – so this is a great team.  Moreover, Graham Bosher, CEO and Will Reeve, chairman are individuals we have known for some time and had previous success with at Lovefilm.

Market, product and team are the basics of any investment, which is why I’ve focused on them above all else, but in addition graze has a number of other attributes that augur well:

  • The graze model is disruptive to existing grocery businesses along two key dimensions:
    • distribution by post is radically cheaper and more convenient to customers than the traditional retail model
    • graze is able to offer a much greater range than shops which are constrained by the availability of physical shelf space
  • They have unlocked a viral mechanic for customer acquisition (due in no small part to the quality of the product) – to see it in action go to the site and use my code to get a free box W698Y3D
  • Graze benefits from long secular trends towards ecommerce and healthy eating
  • And last, but by no means least, THEY ARE GROWING LIKE CRAZY

This is just the beginning of what we hope will be a successful journey, and no doubt there will be ups and downs and much will change over the coming months and years, but hopefully this gives you a flavour of how we think and why we made the investment.

The round size was £2m and was led by Octopus Ventures.  The official press release is here.

Finally, some pictures – showing the product and the growth.

graze box 2


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