Dive Brief:
- GrubMarket has raised $120 million in an oversubscribed Series E funding round, the farm-to-table food delivery service and produce distributor announced in a blog post on Monday.
- Participants in the funding round include new investors Liberty Street Funds, Walleye Capital, Japan Post Capital, Joseph Stone Capital, Pegasus Tech Ventures and Tech Pioneers Fund, along with several existing funders.
- With a pre-money valuation of more than $1 billion, GrubMarket is building its financial muscle as it looks to expand its service areas and considers developing automated hardware to help customers move products to market.
Dive Insight:
In announcing its latest round of funding, GrubMarket emphasized that it intends to aggressively press ahead with its efforts to make the food supply chain more efficient — an area where the company says it believes it has broad latitude to innovate.
In addition to its technology-driven food distribution services, GrubMarket is looking to grow services it markets to wholesalers and distributors, including software designed to manage functions such as inventory, pricing, customer relations and human resources, CEO Mike Xu said in the blog post. Over the longer term, GrubMarket is considering developing robotic systems designed to pick and move food, Xu added.
"We are trying to consolidate the American food supply chain through software technologies, while also trying to find the best solutions in this space," " Xu said in the post, later adding, "But we are not just a lightweight online ordering system."
GrubMarket's latest investment round follows a $90 million Series D funding round that the company closed in 2020. At the time of that announcement, Xu said he hopes ultimately to grow GrubMarket's annual sales to $100 billion.
The company is planning to go public and expects to file paperwork to do so by next summer, according to a report by TechCrunch, which first covered the news about GrubMarket's latest round of fundraising.
GrubMarket, which has thrived as a supplier of produce to retailers and restaurants, currently serves Arizona, California, Connecticut, Georgia, Michigan, New York, New Jersey, Missouri, Massachusetts, Oregon, Pennsylvania, Texas and Washington, according to the blog post. The company also operates about 40 warehouses.
The company's core business of procuring food directly from farmers and eliminating middlemen from the distribution process gives GrubMarket "a lot of room to make money," Xu said earlier this year during RBC Capital Markets' Technology Private Company Conference, adding, "This company ... has an important mission to digitize this very offline and traditional space."
Founded in 2014, GrubMarket has used a series of acquisitions to expand its reach and customer base. In August, GrubMarket announced that it had acquired fresh fruit and vegetable suppliers Atlantic Fresh Trading and L&J Produce. In July, the company said it bought Pacific Farm Management, which provides staffing and human resources services to farms, as well as wholesaler Terminal Produce.
