July 23, 2013, 12:15 PM

Subscription e-retailer NatureBox raises $8.5 million in funding

The healthy snacks merchant also hires two executives, including one from Walmart.com.

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The latest evidence of investor interest in subscription-based online retailers comes from NatureBox Inc. The e-retailer that sends subscribers a box of healthy snack food each month starting at $19.95 said today it has raised $8.5 million in Series A funding. General Catalyst Partners, an early investor in NatureBox, led the financing round,  which also included Softbank Capital, a new investor.

The retailer also has hired two senior executives. Minesh Shah joins NatureBox as vice president of operations and David Lee becomes vice president of engineering. Shah was most recently vice president of operations at Walmart.com, where he led supply chain management. Lee comes from men’s fashion retailer Bonobos, where he was most recently senior director of engineering.

Today’s funding round brings total capital raised by NatureBox in the last seven months to $10.5 million, following a $2 million seed round led by General Catalyst and other investors in December 2012. NatureBox says it will use the money to improve data analytics to get a better idea about the types of products customers want, and to hire engineering and marketing employees.

NatureBox, which launched in January 2012, says it shipped 50,000 boxes to its customers last year and is on track to ship more than 1 million boxes to subscribers in 2013. The company is adding five to 10  products to its line per month. NatureBox sells some 80 items now.

NatureBox.com says it attracted 450,000 total visitors in June and it says it has doubled its number of average total monthly visitors since the beginning of the year. Additionally, the retailer has 460,000 Facebook fans and says it is adding an average of 1,000 new fans each day.

NatureBox distributes its own brands of healthy snack food sourced from local growers as well as independent food suppliers across the United States. Its snacks contain no high-fructose corn syrup, hydrogenated oils, trans fats, or artificial sweeteners, flavors, and colors, the retailer says. NatureBox ships from its distribution center in San Carlos, CA. 

More than 80% of consumers in a 2012 survey conducted by market research firm IRI say they are trying to eat healthier and more than 50% say they rely on snack food to satisfy hunger, as a mini-meal or to get needed nutrition. Additionally, more than 60% say they also snack for enjoyment. NatureBox says such figures suggest that there are good prospects for its business model.

"NatureBox has meaningfully tapped into consumers' need for snacks that are not only better for you but consumable on the go, and people are clearly responding to the service," says Neil Sequeira, managing director of General Catalyst Partners. "I look forward to seeing the company continue to build its offering through even more product variety and an increased ability for users to customize their NatureBox experience."

NatureBox is one of several subscription-based e-retailers to hit the market in recent years. Others include DollarShaveClub.com, bringing consumers a fresh supply of razors each month, make-up retailer Birchbox.com and UnmentionablyCheeky.com, which provides women with three fresh pairs of underwear for $8 per month. 

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