Home Chef grew from $1M to $100M in revenue in 2 years on roughly $10M in total capital raised.
I was lucky to join Home Chef as an investor during this hypergrowth period.
Recently I caught up with Pat Vihtelic, founder of Home Chef, to talk about building his company and what he’s been up to since. After a major acquisition and earn-out period, Pat left the company in 2022.
Here are Pat’s takeaways on building a $700M startup in Chicago. The text in boxes are direct quotes from our conversation:
1. Competing as the #4 Player
Home Chef launched after Blue Apron, HelloFresh, and Plated, all of which had raised $50M+ before Home Chef's first seed round.
Pat's edge wasn't money. It was a simple insight his competitors had overlooked: customers want choice.
"I created a SurveyMonkey survey and asked my customer base how much more they would prefer five meals — a choice out of five — versus a dictated three. It's not surprising, it was overwhelming. Everyone wanted that."
Competitors had already built their entire operations around fixed three-part menus, which made it expensive and painful to adapt. Home Chef moved first, and the gap widened.
Beyond menu flexibility, Pat was also playing a different game entirely when it came to competition:
"A new customer of ours wasn't someone who had tried Blue Apron or HelloFresh and then switched over to us. It was generally someone who had never even heard of the meal kit concept before. The alternative for them is either getting takeout or going to the grocery store."
He never believed the meal-kit market was winner-take-all. He looked to the top 10 grocery brands in the US, each doing $10B+ annually, as thought it was big enough for multiple winners. He was right.
2. Building in the Midwest
Pat is direct about the tradeoffs of building in Chicago.
The disadvantages were real. VCs used to require in-person meetings before cutting a check, which meant flying to the coasts just to get in the room. Recruiting talent from the Bay Area or New York was a constant uphill battle.
"It's tough to convince people from other cities to relocate to Chicago. I like to do my recruiting in the summer when Chicago is a little more attractive. We tended to close a little better when the weather was cooperating."
But the advantages were just as real. And more durable.
"The thing I would point to the most is probably talent and the team I was able to build without having to go outside of the city. I recruited a lot from the professional services industry — management consulting, investment banking, accounting. Chicago is a great place to recruit because it's got such a large home base of talent."
And being close to Midwest customers shaped the product itself. While New York-based competitors built menus that were exotic and culinary-forward, Home Chef leaned into approachable, family-friendly meals. It was a deliberate strategic choice rooted in proximity to the people they were actually serving.
3. Fundraising Journey
The fundraising story is one of the most revealing parts of Pat's journey. It almost didn't happen.
"Most Chicago investors at that time, their question was: 'How soon do you get to profitability?' And I was just explaining to them that's not the goal here. The goal is to prove out economics, prove out that there's a customer acquisition formula that works. That was almost impossible to find in Chicago at that time."
The breakthrough came through Ian Shovlin at Guild Capital, a rare Chicago investor who had come from coastal growth equity and understood the playbook.
"Shortly after he invested $500,000, Ian was asking how quickly I think I can spend that. It was just the opposite of everything I'd heard from investors."
After proving the economics, Pat raised $1–2M from angels (including Eddie), then a Series A from Shining Capital — a Hong Kong-based fund — in what he describes as an unconventional process.
The Series B was $40M from L Catterton, raised after Home Chef had already posted a profitable quarter. Bay Area VCs like Lightspeed passed.
"I can remember meeting with a partner there and he said, 'Why am I going to invest in you guys? You're not number one. You're not number two. You're not even number three.' And I was like: the space is huge. Just give me some time. Watch."
The firms willing to bet on Home Chef were private equity-minded investors who understood profitability as a moat, not just a milestone.
4. Growth with Capital Efficiency
The revenue trajectory speaks for itself: $1M in 2015 → $10M in 2016 → $100M in 2017. 10x, two years in a row.
What makes it remarkable is how it happened:
"We achieved all of that on roughly $10M in total capital raised — and still had cash in the bank."
The business model created a natural flywheel. Customers paid immediately. Suppliers were on 30–60 day terms. That negative working capital position meant Home Chef was essentially financing its own growth.
Pat was also obsessive about the metrics that actually mattered:
"Things like managing our customer acquisition costs and understanding the lifetime value of a customer, knowing how quickly we could make our marketing dollars back by having our retention dialed in, knowing what our margin is. Because we didn't have as much capital readily available, we were perhaps a little more disciplined on how we were spending our money."
By the time they sold, the company had 3,000–5,000 employees and three fulfillment facilities with full US coverage.
5. The Kroger Exit
After Blue Apron's IPO in 2017, Pat saw what was coming.
"I was pretty convinced that an IPO wasn't a viable option for us pretty quickly. And I was also convinced that there was about to be this game of musical chairs — and I didn't want to be the last one standing."
Home Chef received two acquisition offers that summer and walked away from both. Pat then did something unusual: he fired the investment bank and went out on his own to find buyers. One name kept nagging at him: Kroger.
"I couldn't believe they weren't interested in having a conversation with me or with anyone in the meal kit space."
Through a warm introduction, Pat got an email to Kroger's COO. The COO didn't reply, but an EVP did, and sent a calendar invite for a Chicago visit. When Pat looked at the attendees list, he started Googling names.
"One of those was the CEO of Kroger. That had failed to be mentioned in the initial invite."
What followed was one of the more unusual deal processes in startup M&A: Kroger and Home Chef signed mutual exclusivity with no term sheet. Neither side could talk to others for three months. No indication of value until March 2018, after months of whiteboarding sessions.
Pat's negotiating position was strong for one reason above all:
"We were profitable during that whole time. I still had $25 million in the bank. We didn't have to do it."
The deal: $200M upfront + $500M earnout over four years. All earnout targets were hit.
6. Post-Exit & What Pat's Doing Now
Pat stayed with Home Chef through 2022, serving on an advisory board with L Catterton and Kroger execs. Leaving wasn't easy.
"I missed the camaraderie and the team aspect of it — just casually, socially, as well as business-wise talking strategy or tactics with the team. It was tough to leave for sure. Bittersweet, no doubt. I still miss it sometimes."
Most of the executive team he hired is still at Home Chef, operating autonomously and still headquartered in Chicago.
Today, Pat is angel investing in roughly two dozen companies and several funds, serving on philanthropic and e-commerce boards, and still building businesses. He also bought Rise Gardens — an indoor hydroponic gardening company — out of bankruptcy and got it to cash-flow positive.
But buying a company is not the same as starting one. He's candid about what this chapter has taught him:
"Building culture is the most important thing for a company over the years. And it's really tough to do that if you're not there early."
And despite everything, he still has the itch:
"I've got the itch to get back into an operator's seat."
The One Thing: Perseverance
When asked what advice he'd give to founders grinding it out in an overcrowded, underfunded market, Pat didn't reach for a framework or a playbook.
"Perseverance and keeping your head down. If you are convinced of something, persevering through all the noise and the no's — I think that's the single most important thing. There's going to be a lot of doubters. Lots of no's. Friends, family, investors. They come from all over the place. And I think if you can persevere through all of that, you're going to have a much better shot at ending up on top."
"I think people give up too early. I'm sure there's a lot of great companies out there that never came to be because someone gave up on it too early."
I agree 100% with Pat’s advice (though I like saying GRIT). Home Chef is proof that you don't have to be first, best-funded, or coast-based to win. You just have to stay in the game long enough to be right.