Sarah Frimpong spent 2021 plotting an expansion of her startup’s tech-enabled vending machines. The name of the game for 2022: execution.
D.C.’s Wellfound Foods is locking in new deals to get more of its machines, which dispense prepared foods, into health care facilities, government buildings, universities, transportation hubs and other businesses around the region and beyond.
Among those agreements: a systemwide deal with Columbia, Maryland-based MedStar Health that puts the startup’s machines, called SmartMarkets, into six of the system’s hospitals in the District and Maryland. The deal has already nearly tripled Wellfound’s presence in the Baltimore area, with the potential to add more of the organization’s sites — hospitals, urgent care centers and offices — going forward.
The company has also secured contracts with food service firms like Gaithersburg’s Sodexo, Philadelphia’s Aramark and Charlotte, North Carolina’s Canteen to put its machines in their clients’ locations. That’s a big deal, because “larger companies with broader services often win the contracts,” Frimpong said, adding that Wellfound’s focus on fresh food helped carve out its own niche.
With these deals, the startup is on track to more than double its kiosk count this summer; it opened this year with 22 operational machines and should have 50 go live by Labor Day. Then the pace will pick up, said Wellfound Foods Chief Operating Officer Brian Becker. “July and August are typically a little bit slower. Come September, we’re going to be shot out of a cannon.”
The business is shooting to have about 80 fridges in the field by year’s end, shy of its initial 100-machine target because “the supply chain has continued to not be able to keep up with our growth,” Frimpong said. Still, she said, the company is positioned well for the upcoming months, now “selling ahead of current inventory” to new and existing customers.
Wellfound is also preparing to nearly triple the footprint of its Northeast D.C. production facility, where it currently occupies 3,200 square feet. The company co-leases the space with meal-delivery service Vegetable and Butcher, which plans to move in November. At that point, Wellfound intends to take over that lease, which will allow it “to make so much more food so much more efficiently, and really focus on growing out the team,” Frimpong said.
The startup has grown to 18 people, up from 14 in January, and expects to hit 35 employees by the end of the year. It has six open positions currently across roles, from making, packing and delivering items to servicing the machines, Becker said.
“For a lot of hourly employees during the pandemic, particularly in food service, it was a question of whether or not we would be able to provide enough hours to keep them on,” he said, “and now we’ve reached the inflection point where everybody has more hours than we want them to have.”
The team is also adding features to its mobile app including promos and discounts, and touchless pickup, which allows customers to pay for food before grabbing it from the machines. A reservation feature — that lets customers reserve their favorite snacks for pickup — is also set to roll out in the next few weeks, Frimpong said.
The app first launched in April thanks to support from D.C.’s MassLight Inc., a software company that builds apps for startups in exchange for equity — and an investor in Wellfound’s $1.4 million bridge round. Wellfound has also launched a forecasting platform that provides real-time sales data from all of the machines. The goal: predict where to send food, Frimpong said. “We’re trying to drive sales through the app and we’re trying to increase our efficiency through sending the right food to the right machines at the right time.”
She declined to disclose revenue, but said the company’s monthly run rate for 2022 is triple that of 2021. The company is holding off on a Series A round until later this year, she added.
Wellfound Foods, one of our Startups to Watch of 2022, was born in 2013 as Broodjes & Bier. But what was envisioned as a fast-casual restaurant transformed after Frimpong joined a local kitchen incubator and started making grab-and-go food for local retailers. The company pivoted when the Covid-19 pandemic brought its wholesale distribution to a screeching halt. Since then, the vending machine model has become the backbone of the business.
