GrubMarket raises $32 Mn for Healthy Grocery Ordering
GrubMarket which sources organic and healthy food directly from producers and then delivers it to other businesses (Whole Foods is a customer) as well as consumers at a discount of 20-60 percent over other channels has raised $32 million round to grow its already profitable business, including making acquisitions and expanding on its own steam as it eyes a public listing.
“We are looking to buy companies to make more revenues ahead of an upcoming IPO,” mentioned Mike Xu, the founder and CEO. He mentioned GrubMarket is “in proactive steps” to increase from its house base in California to the East Coast, beginning in New York and New Jersey, by October this 12 months. The plan, he mentioned, will probably be to file with the SEC someday between the top of this 12 months and early 2019, with the IPO happening within the second half of 2019.
Food is the largest and biggest opportunity in e-commerce,” he mentioned, estimating that immediately the full worth for the worldwide meals and agricultural trade is round $9 trillion (versus $eight trillion in 2017), with solely about one p.c of shopping for achieved on-line. “That’s a big enough opportunity to have a few giant companies, and not just Amazon.”
Working directly with farmers and other producers, GrubMarket has built apps that allow it and its partners to manage the logistics of the business in an efficient way. The idea will be to bring more AI to the platform over time: for example, to be able to run better modelling to figure out how much fruit and veg might sell during a given season, and how to price items.
This latest round is a mixture of equity and debt and is being led by GGV with other previous investors Fusion Fund (formerly New Gen Capital) and Great Oaks Venture Capital participating, along with new investors Max Ventures, Castor Ventures, Bascom Ventures, Millennium Technology Value Partner, Trinity Capital Investment, Investwide Capital and others. The company is not publicly disclosing its valuation; it has raised around $64 million to date.
Xu says that as the company continues to grow, it will shift more into direct-to-consumer deliveries to complement its wholesale business.