{"id":30634,"date":"2020-10-05T17:44:13","date_gmt":"2020-10-05T12:44:13","guid":{"rendered":"https:\/\/techcrunch.com\/?p=2056043"},"modified":"2020-10-05T17:44:13","modified_gmt":"2020-10-05T12:44:13","slug":"grubmarket-raises-60m-at-a-500m-valuation-as-food-delivery-stays-center-stage","status":"publish","type":"post","link":"https:\/\/www.technologyforyou.org\/grubmarket-raises-60m-at-a-500m-valuation-as-food-delivery-stays-center-stage\/","title":{"rendered":"GrubMarket raises $60M at a $500M+ valuation as food delivery stays center stage"},"content":{"rendered":"
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Companies that have leveraged technology to make the procurement and delivery of food more accessible to more people have been seeing a big surge of business this year, as millions of consumers are encouraged (or outright mandated, due to Covid-19) to socially distance or want to avoid the crowds of physical shopping and eating excursions.<\/p>\n

Today, one of the companies that is supplying produce and other items both to consumers and other services that are in turn selling food and groceries to them, is announcing a new round of funding as it gears up to take its next step, an IPO.<\/p>\n

GrubMarket<\/a>, which provides a B2C platform for consumers to order produce and other food and home items for delivery, and a B2B service where it supplies grocery stores, meal-kit companies and other food tech startups with products that they resell, is today announcing that it has raised $60 million in a Series D round of funding.<\/p>\n

Sources close to the company confirmed to TechCrunch that GrubMarket <\/span><\/a> \u2014 which is profitable, and originally hadn\u2019t planned to raise more than $20 million \u2014 is now valued at around $500 million.<\/p>\n

The funding is coming from funds and accounts managed by BlackRock, Reimagined Ventures, Trinity Capital Investment, Celtic House Venture Partners, Marubeni Ventures, Sixty Degree Capital, Mojo Partners alongside with previous investors GGV Capital, WI Harper Group, Digital Garage, CentreGold Capital , Scrum Ventures, and other unnamed participants. Past investors also included Y Combinator, where GrubMarket was part of the Winter 2015 cohort), and for some more context, GrubMarket last raised money in April 2019<\/a>, $28 million at a $255 million valuation.<\/p>\n

Mike Xu, the founder and CEO, said that the plan remains for the company to go public (he\u2019s talked about it before) but given that it\u2019s not having trouble raising from private markets and is currently growing at 100% over last year, and the IPO market is less certain at the moment, he declined to put an exact timeline on when this might actually happen, although he was clear that this is where his focus is in the near future.<\/p>\n

\u201cThe only success criteria of my startup career is whether GrubMarket can eventually make $100 billion of annual sales,\u201d he said to me over both email and in a phone conversation. \u201cTo achieve this goal, I am willing to stay heads-down and hardworking every day until it is done, and it does not matter whether it will take me 15 years or 50 years.\u201d<\/p>\n

I don\u2019t doubt that he means it. I\u2019ll note that we had this call in the middle of the night his time in California, even after I asked multiple times if there wasn\u2019t a more reasonable hour in the daytime for him to talk. (He insisted that he got his best work done at 4.30am, a result of how a lot of the grocery business works.) Xu on the one hand is very gentle with a calm demeanor, but don\u2019t let his quiet manner fool you. He also is focused and relentless in his work ethic.<\/p>\n

When people talk today about buying food, alongside traditional grocery stores and other physical food markets, they increasingly talk about grocery delivery companies, restaurant delivery platforms, meal kit services and more that make or provide food to people by way of apps. GrubMarket has built itself as a profitable but quiet giant that underpins the fuel that helps companies in all of these categories by becoming one of the critical companies building bridges between food producers and those that interact with customers.<\/p>\n

Its opportunity comes in the form of disruption and a gap in the market. Food production is not unlike shipping and other older, non-tech industries, with a lot of transactions couched in legacy processes: GrubMarket has built software that connects up the different segments of the food supply chain in a faster and more efficient way, and then provides the logistics to help it run.<\/p>\n

To be sure, it\u2019s an area that would have evolved regardless of the world health situation, but the rise and growth of the coronavirus has definitely \u201chelped\u201d GrubMarket not just by creating more demand for delivered food, but by providing a way for those in the food supply chain to interact with less contact and more tech-fueled efficiency.<\/p>\n

Sales of WholesaleWare, as the platform is called, Xu said, have seen more than 800% growth over the last year, now managing \u201cseveral hundreds of millions of dollars of food wholesale activities\u201d annually.<\/p>\n

Underpinning its tech is the sheer size of the operation: economies of scale in action. The company is active in the San Francisco Bay Area, Los Angeles, San Diego, Seattle, Texas, Michigan, Boston and New York (and many places in between) and says that it currently operates some 21 warehouses nationwide. Xu describes GrubMarket as a \u201cmajor food provider\u201d in the Bay Area and the rest of California, with (as one example) more than 5 million pounds of frozen meat in its east San Francisco Bay warehouse.<\/p>\n

Its customers include more than 500 grocery stores, 8,000 restaurants, and 2,000 corporate offices, with familiar names like Whole Foods, Kroger, Albertson, Safeway, Sprouts Farmers Market, Raley\u2019s Market, 99 Ranch Market, Blue Apron, Hello Fresh, Fresh Direct, Imperfect Foods, Misfit Market, Sun Basket and GoodEggs, all on the list, with GrubMarket supplying them items that they resell directly, or use in creating their own products (like meal kits).<\/p>\n

While much of GrubHub\u2019s growth has been \u2014 like a lot of its produce \u2014 organic, its profitability has helped it also grow inorganically. It has made some 15 acquisitions in the last two years, including Boston Organics and EJ Food Distributor this year.<\/p>\n

It\u2019s not to say that GrubMarket has not had growing pains. The company, Xu said, was like many others in the food delivery business \u201coverwhelmed\u201d at the start of the pandemic in March and April of this year. \u201cWe had to limit our daily delivery volume in some regions, and put new customers on waiting lists.\u201d Even so, the B2C business grew between 300% and 500% depending on the market. Xu said things calmed down by May and even as some B2B customers never came back after cities were locked down, as a category B2B has largely recovered, he said.<\/p>\n

Interestingly, the startup itself has taken a very proactive approach in order to limit its own workers\u2019 and customers\u2019 exposure to Covid-19, doing as much testing as it could \u2014 tests have been, as we all know, in very short supply \u2014 as well as a lot of social distancing and cleaning operations.<\/p>\n

\u201cThere have been no mandates about masks, but we supplied them extensively,\u201d he said.<\/p>\n

So far it seems to have worked. Xu said the company has only found \u201ca couple of employees\u201d that were positive this year. In one case in April, a case was found not through a test (which it didn\u2019t have, this happened in Michigan) but through a routine check and finding an employee showing symptoms, and its response was swift: the facilities were locked down for two weeks and sanitized, despite this happening in one of the busiest months in the history of the company (and the food supply sector overall).<\/p>\n

That\u2019s notable leadership at a time when it feels like a lot of leaders have failed us, which only helps to bolster the company\u2019s strong growth.<\/p>\n

\u201cHaving a proven track record of sustained hypergrowth and net income profitability, GrubMarket<\/span> stands out as an extraordinarily rare Silicon Valley startup in the food technology and ecommerce segment,\u201d said Jay Chen, managing partner of Celtic House Venture Partner. \u201cScaling over 15x in 4 years, GrubMarket<\/span>\u2019s creativity and capital efficiency is unmatched by anyone else in this space. Mike\u2019s team has done an incredible job growing the company thoughtfully and sustainably. We are proud to be a partner in the company\u2019s rapid nationwide expansion and excited by the strong momentum of WholesaleWare, their SaaS suite, which is the best we have seen in space.\u201d<\/p>\n

By TechCrunch Source Link<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Companies that have leveraged technology to make the procurement and delivery of food more accessible to more people have been seeing a big surge of business this year, as millions of consumers are encouraged (or outright mandated, due to Covid-19) to socially distance or want to avoid the crowds of physical shopping and eating excursions. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14083],"tags":[9211,14383,14377,14384,14385,14386,14281,231,14178],"class_list":{"0":"post-30634","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-technology-industry-news","7":"tag-ecommerce","8":"tag-enterprise","9":"tag-food","10":"tag-food-delivery","11":"tag-grocery-delivery","12":"tag-grubmarket","13":"tag-recent-funding","14":"tag-startups","15":"tag-tc"},"_links":{"self":[{"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/posts\/30634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/comments?post=30634"}],"version-history":[{"count":0,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/posts\/30634\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/media?parent=30634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/categories?post=30634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/tags?post=30634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}