3 Mins Read
SIMULATE, the startup responsible for the plant-based NUGGS brand which it produces from ghost kitchens, has raised US$50 million in a Series B funding round led by co-founder of Reddit Alexis Ohanian’s venture firm Seven Seven Six at an updated valuation of over US$250 million.
New York-based SIMULATE’s Series B funding round was led by venture firm Seven Seven Six, with the support of other investors like Chris Sacca and Crystal Sacca, Nomo Ventures, McCain Foods, Imaginary Ventures and Day One Ventures. According to Pitchbook data, this marks Seven Seven Six’s first food investment.
Founded in 2018, SIMULATE, the maker of plant-based chicken nuggets dubbed NUGGS and patty alternatives known as DISCS, is known for its controversial marketing slogans including “Tesla of Chicken” and “Kill You Slower”. The startup has plans to develop more products, for instance, a beef alternative. It is currently stocked by retailers like Walmart, Target, Whole Foods and Sam’s Club.
The company will use this new funding to ramp up new product development, triple its employee base from its current 20 to add more scientists and engineers by 2022, scale up its manufacturing capabilities, and expand its retail and food-service presence.
SIMULATE founder and CEO Ben Pasternak told TechCrunch that in the midst of the pandemic, consumers wanted frozen food shipped directly to their door, which the company was more than happy to focus on. Today, they are expanding their go-to market channels. “At the time, we were DTC only, so we saw a lot of growth there prior to our pivot to retail. We are getting ready to launch in restaurants and in fast food. Internationally, we recently launched across Canada, and have plans to expand to other countries too.”
We are getting ready to launch in restaurants and in fast food. Internationally, we recently launched across Canada, and have plans to expand to other countries tooBen Pasternak, founder and CEO of SIMULATE
Despite the initial success of the nuggets and the support of investors, in mid-2020, the company was not yet available in retail stores or fast-food outlets. Pasternak thought of pop-up food trucks near college campuses but given that scaling the idea would be challenging, the team opted to test the ghost kitchen model.
Even though Nuggs wasn’t a new or established restaurant, the company launched its own ghost kitchen in San Francisco this past September and has seen massive growth, with the product awarded UberEats users’ 10 favourite delivery spots in that area and with delivery orders increasing by four times to its website traffic soaring over 300%.
With retail and food service, the necessary evil is having these large distributors that aren’t agile at all, which doesn’t allow you to iterate quickly within their systems. (Ghost) kitchens allow us to experiment with anything really quicklyBen Pasternak, founder and CEO of SIMULATE
In another interview, Pasternak said: “We got so much traction over the past year, now launching into retail, it seems that companies that don’t have their own platform first find it very difficult to find traction. Whereas for us, with DTC and cloud kitchens, we have this existing user base, and retail is just another way for them to get the product they’re already familiar with. With retail and food service, the necessary evil is having these large distributors that aren’t agile at all, which doesn’t allow you to iterate quickly within their systems. (Ghost) kitchens allow us to experiment with anything really quickly.”
According to Euromonitor, ghost kitchens are predicted to become a US$1 trillion industry by 2030.
SIMULATE used the model to beta test its new products like DISCS, and with the expansion of the model to Los Angeles with plans to open one in New York, the team shared that they will continue operations not necessarily to scale it but the crucial role it plays in their R&D.
Lead image courtesy of SIMULATE.