In morning trade the Marley Spoon AG (ASX: MMM) share price has surged higher after announcing a new funding deal.
At the time of writing the global subscription-based meal kit provider's shares are up 9% to 49 cents.
What did Marley Spoon announce?
This morning the company announced that it has approved structured debt transactions with two of its existing investors, amounting to ~$8 million in aggregate.
This has seen both US based venture capital firm Union Square Ventures, through two affiliated funds, and Woolworths Group Limited (ASX: WOW) invests a further ~$4 million each into the company
The company's co-founder and CEO, Fabian Siegel, was pleased with the deal.
He said: "We are happy to see the continued support of key investors and strategic partners in the ongoing growth of Marley Spoon. Consumers continue to discover our meal kit brands that offer a more convenient and sustainable way for weeknight cooking."
"Over the past few years the Marley Spoon team has built a A$200,000,000 run-rate revenue business that continues to grow fast as consumers continue to switch from offline shopping to online meal-kits. We believe we are just witnessing the beginning of consumer adoption in our industry," he added.
These investments are structured in a similar way to the ones both Union Square and Woolworths agreed to earlier this year.
For Woolworths, this means a senior secured commercial loan agreement for a loan amount of $4,047,250. This loan has a term of six months and bears interest at a fixed rate of 7% p.a. Subject to shareholder approval, the company may elect to substitute the Woolworths loan amount for one non-pro rata, senior secured five-year term convertible note instrument.
After which, Woolworths may then convert the convertible note to shares after two years from the issue date and until maturity.
Overall, whilst this is pocket change for a company like Woolworths, I still think it is a big positive for Marley Spoon and shows that even the big supermarket players believe the meal kit industry has a lot of potential. In light of this, I can't say I'm surprised to see its shares push higher today.
