Meal kit startup Sunbasket is combining with Prvit, a keto supplements-maker, in a deal that values the new company at $1.3 billion – Markets Insider

Sunbasket CEO Don Barnett

Sunbasket

Meal kit delivery service Sunbasket and Prvit, a maker of keto supplements, have combined in an all-stock deal that values the new company at more than $1.3 billion, according to a statement shared with Insider.

The combined company, called PSB Holdings, will focus on creating a single, wellness platform combining food kits and supplements, along with an existing community of health and fitness users. The company also has plans to expand wellness offerings. Prvit shareholders will own 60% of the new company, while Sunbasket's will retain 40%.

Founded in 2014, San Francisco-based Sunbasket is a subscription meal service that ships members fresh organic and sustainable ingredients and recipes every week, allowing them to cook meals such as a Thai-style spicy noodle soup or a chicken and egg donburi rice bowl. It differentiates itself from other delivery services by offering paleo, gluten-free and other special diet options.

"Sunbasket is excited to further our mission to help people lead healthier lives with broader distribution of our chef-crafted, nutrient-rich meals," said Sunbasket CEO Don Barnett, in the statement.

Sunbasket has raised about $140 million from investors like Sapphire Ventures and Unilever, according to PitchBook. One investor, Cameron Newton, from Nashville-based wellness venture capital firm Relevance Ventures, helped orchestrate the deal by introducing the parties involved.

In October, Sunbasket announced it was partnering with Instacart and offering its prepared meals, meal kits and grocery add-ons for on-demand delivery.

Barnett and Brian Underwood will remain CEOs of Sunbasket and Prvit, respectively, and the two companies will operate as independent subsidiaries under the new company. Recruiting for a new CEO to oversee the combined business is underway.

Founded in 2015 by Underwood, Prvit is best known for its ketone supplement drink, KETO//OS. The company uses multilevel marketing to sell its products by encouraging existing distributors to recruit new members to increase sales.

Meal kit delivery companies such as Sunbasket, HelloFresh and Blue Apron have benefited from increased demand from customers stuck at home during the pandemic. Last year, total sales were up 69% compared to 2019, and this year, sales have inched up 18% year-over-year, according to a July report from Coresight Research. The research firm expects meal-kit companies' growth to slow this year and beyond as they face more competition.

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Meal kit startup Sunbasket is combining with Prvit, a keto supplements-maker, in a deal that values the new company at $1.3 billion - Markets Insider