NatureBox has created an ecommerce destination for healthy snacking, and it has $2M in Seed funding to make it happen
A Q&A with NatureBox co-founder and CEO Gautam Gupta. The San Carlos, California–based company was founded in early 2012 and closed a $2 million Seed funding round in mid-December. Investors include General Catalyst Partners and Redpoint Ventures.
SUB: Please describe NatureBox and your value proposition.
Gupta: NatureBox is trying to build a personalized food shopping experience online that caters to the consumer’s taste and dietary preferences. We have initially started by focusing on snacks because almost all Americans eat snacks. In fact, Americans are eating so many snacks that snacking has become one of the leading causes of obesity. We felt that by creating our own line of products we could help consumers eat better and also build a foundation to expand the food ecommerce category.
SUB: Who are your target markets and users?
Gupta: We truly believe that anyone can find value in NatureBox. Statistically, almost all of us enjoy snacks with some frequency. We are finding that our customer base is quite broad from a demographic standpoint. We like that opportunity to cater to a number of different target customers to build what we hope will become a household brand.
SUB: Who do you consider to be your competition?
Gupta: I consider our true competition to be offline stores—namely Whole Foods and Trader Joe’s. While each only have around 300-to-350 stores in the country, they each generate about $10 billion in revenue annually. We think there is a huge market out there and someday, we hope that consumers make a choice between shopping with us or their local grocery store.
SUB: What differentiates NatureBox from the competition?
Gupta: We try to focus on health and wellness. We have nutritionists on staff and every product we sell must pass nutritional filters before we’ll allow it to be sent to a customer. We try to source the best ingredients and really cater to the customer’s desire for unique foods that they can’t find in the neighborhood grocery store. We have a long way to go in improving our offering and there is much coming in the next few months that we think will continue to improve our offering to consumers.
SUB: When was the company founded and what were the first steps you took in establishing it?
Gupta: My friend from college, Ken Chen, and I started the business together in January 2012. We had done some initial testing in the Fall of 2011 and decided to take the plunge. When we started out we had barely a clue of how the food industry worked and not a single customer. The first steps for us were to find manufacturers and suppliers that would work with us and then figure out how we were going to create a product that people would want to buy. The first few months of figuring out our supply chain were difficult but seeing the demand from customers made us charge through the tougher days.
SUB: What was the inspiration behind the idea for NatureBox? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Gupta: The idea for NatureBox stemmed from my struggle with being overweight as a teenager. I was overweight because of a combination of a sedentary lifestyle and an endless stream of after school snacking. This led to a 70-to-80 pound weight gain during my high school years. I finally lost about 70 pounds in the six months leading up to college and that started an interest for me in health and wellness and dietary behavior. When Ken and I got together to talk about starting a company, we landed on food because of our personal interest in the category. Since we were both working at other jobs back then, we had to take vacation time just to work on the idea for NatureBox. It ended up coming together over a weekend when we locked ourselves in an office, determined to hammer out the details before heading home.
SUB: How did you come up with the name? What is the story behind it?
Gupta: We wanted a name that was easy to remember and spell. We felt that NatureBox was a perfect name for us for those reasons. We asked a bunch of friends what they thought and as always, the reviews were mixed. We decided that it was important to have a name that was memorable and simple and so we stuck with NatureBox.
SUB: What have the most significant obstacles been so far to building the company?
Gupta: Managing growth. We have been growing the business pretty fast this year and just keeping up with demand has been tough. We sold out of our boxes every month since June—we’ve obviously had to get better in projecting demand. Every month, we get better equipped to manage changes in the business.
SUB: You recently raised $2 million in Seed funding. What are your plans for the funds?
Gupta: We have a lot of exciting changes coming in 2013. Aside from the growth of our customer base, we’re growing our product assortment and getting into new and unique products. We are also growing our team. We have a number of openings on the team right now and expect to continue adding folks in key areas like marketing, operations and technology.
SUB: Why was this a particularly good time to raise funding?
Gupta: We thought that it was a good time because we had started to prove parts of the business model and felt that we had a clear idea of how we could use the funds to grow.
SUB: How does the company generate revenue or plan to generate revenue?
Gupta: We charge for every NatureBox we send out and we have been generating revenue effectively since day one.
SUB: What are your goals for NatureBox over the next year or so?
Gupta: Over the next year we plan to add a number of new features to our site that will be unique to NatureBox and will provide our customers with a radically new shopping experience.
NatureBox – www.naturebox.com