TCG Buys Majority Stake in Food52 for $83 Million
By Benjamin Mullin
Food52, a digital bazaar that sells upscale home goods, said it
sold a majority stake to venture firm TCG for $83 million, a deal
that gives TCG an entree into the world of fine dining and home
The companies said the stake sale values Food52 at more than
$100 million, declining to be more specific. Food52 says it
generated about $30 million in revenue last year but isn't
Food52 previously raised $13 million from investors including
Lerer Hippeau Ventures, Bertelsmann Digital Media Investments Inc.
and Scripps Networks Interactive, which was acquired by Discovery
Inc. last year.
Founded in 2009 by Amanda Hesser and Merrill Stubbs, veteran
food journalists who worked for the New York Times, Food52 offers
recipes and home-improvement tips as well as selling its own
products to online shoppers. Two of its top sellers are an apron
with built-in potholders ($45) and a double-sided cutting board
with an extra-deep juice-trough ($59).
Food52 incorporates guidance from its audience while developing
its products, Ms. Hesser said. The popular apron and cutting board
were informed by suggestions from Food52 readers, who responded to
a survey on the company's website.
"In retail, there's almost no interaction between the consumers
and producers," Ms. Hesser said. "We wanted to break down those
Food52 is among a crop of media companies that make much of
their revenue from e-commerce -- both by selling their own products
online and by referring their readers to online retailers like
Amazon.com Inc. to buy other products. If a reader buys a product
from Amazon, Food52 gets a cut of the sale.
Sales of products from the company's own line, dubbed "Five
Two," are much more common and more profitable than affiliate sales
on Amazon. Food52 gets a tiny fraction of its revenue from
affiliate sales, a company spokesman said.
Ms. Hesser, Food52's chief executive, and Ms. Stubbs, the
company's president, said in an interview that they decided to sell
a stake in the company after a diligence and negotiation process
that began last year with an email from an employee at TCG. The
company's line of custom home goods was selling briskly, and the
co-founders decided to take on additional investment to grow that
"We realized that there was huge potential to really blow this
out," said Ms. Stubbs.
TCG was founded in 2018 by Peter Chernin, the former chief
operating officer of News Corp., the parent company of Wall Street
Journal publisher Dow Jones & Co., alongside Mike Kerns and
Jesse Jacobs. TCG owns a controlling stake in MeatEater Inc., a
digital media company aimed at hunters, fishermen and home cooks,
and has also invested in Action Network, a sports-betting analytics
Ms. Hesser said Food52 is using some of the new money to develop
a bricks-and-mortar store that will sell its line of home goods.
The company also plans to hire staffers for computer engineering
and product development.
"We're planning to open our first store over the next year, as
well as pop-up [stores]," Ms. Hesser said.
Some of TCG's investment is being used to buy out existing
Mr. Kerns of TCG said Food52's product line and affiliate
revenue made it attractive among media operators.
"With respect to verticalized digital media companies, we think
it's important for those businesses not to be advertising-based,"
Mr. Kearns said. "We look for diversified business models."
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com
(END) Dow Jones Newswires
September 29, 2019 14:24 ET (18:24 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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