Woolworths Group Ltd (ASX: WOW) and Marley Spoon AG (ASX: MMM) are going to work together on some ideas.
Woolworths was founded in 1924 by Percy Christmas, its first store was opened in Sydney’s Imperial Arcade. Woolworths is Australia’s largest supermarket business, it operates Woolworths supermarkets in Australia and Coundown in New Zealand. It also runs the retail department store Big W. With over 3,000 stores and more than 200,000 employees it’s one of Australia’s largest employers.
Marley Spoon was founded in 2014. It’s a subscription-based weekly meal kit service for customers in Australia, the United States and Europe. At the end of March 2019 Marley Spoon had over 190,000 active customers across Marley Spoon and Dinnerly.
What Are Woolworths and Marley Spoon Doing?
Woolworths is providing $30.05 million in funding to Marley Spoon in a combination of debt and shares. Part of the proceeds will be used to repay the Moneda debt of €5.3 million.
The two companies are going to work together to grow the Marley Spoon and Dinnerly brands in Australia and also identify & implement operational synergies with an exclusive term of five years.
Marley Spoon will benefit from Woolworths’ large customer base, as well as its sourcing and supply chain expertise.
Meanwhile, Woolworths will benefit from seeing how Marley Spoon operates in the home-delivering meal kit sector. Woolworths wants to expand its current customer offering.
Woolworths CEO Brad Banducci said: “This partnership gives Woolworths exposure to the high growth, ready to cook meal kits segment and aligns with our ongoing goal of meeting our customers’ needs for healthy and convenient meal solutions. Marley Spoon has demonstrated it has a customer focused, innovative and entrepreneurial culture and we are excited to partner with them.”
The opportunity is there for both businesses to benefit from this deal, so I think it’s a smart move, particularly by Marley Spoon. However, I think there are even more exciting shares out there, such as the growth shares in the free report below.
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