Funds continue to pour in for online grocery, with providers that differentiate meaningfully from competitors in the crowded space especially standing out.
On Monday (Feb. 28), for instance, online grocer Weee, which specializes in delivery of groceries from a range of ethnicities, announced that it has raised $425 million in its Series E funding round.
The Fremont, California-based eGrocer, which specializes in items from Asian and Hispanic cultures with plans to add more ethnicities in the future, has with this latest haul raised more than $800 million overall. The round was led by SoftBank Vision Fund 2, with Lydia Jett, managing partner at Softbank Investment Advisors, joining the grocer’s board of directors.
“We’ve seen tremendous growth in 2021, even through the easing of COVID-19 related pressures, as our customers continue to discover affordable access to a wide array of exciting products and food online,” Larry Liu, founder and CEO of Weee, said in a statement. “We look forward to building on that momentum as we add depth to our investor base with Softbank’s global e-commerce expertise.”
This is not the company’s first massive raise. Nearly a year ago, in March 2021, the grocer announced a $315 million fundraise in its Series D round led by DST Global.
Related news: Ethnic Online Grocer Weee! Nets $315 Million To Fund Expansion
As online grocery options grow, some are predicting that services will need to specialize to differentiate, as Weee has with its focus on specific cultures’ products.
“[In five years], each market will be divided among three, maximum four, players … Each player would have to occupy a certain niche,” Maxim Avtukhov, head of international markets at Yango Deli, the 15-minute grocery delivery arm of Russian tech giant Yandex, predicted to PYMNTS in an interview. “Either it’s indulgence or a focus on fresh and local or a wider assortment and more affordable offering … It’s not like in the offline world, where you have many, many offline retail chains that can be simultaneous players in the market. This would be, I would say, a more consolidated segment.”
Read more: To Make the Economics Work, Ultra-Fast Grocers Must Digitize Every Step of the Process
Indeed, this differentiation was a key motivator for SoftBank.
“The market for ethnic groceries and food is massively underserved in the U.S., and we believe that Weee! is in a prime position to meet the demands of customers,” Jett said in a statement.
A relatively small but growing share (18%) of consumers now purchase groceries digitally more frequently than they purchase them in stores, according to data from PYMNTS’ study Decoding Customer Affinity: The Customer Loyalty to Merchants Survey 2022, created in collaboration with Toshiba Global Commerce Solutions. The report, which featured the results of a survey of a census-balanced panel of more than 2,000 U.S. consumers conducted in the late fall, also found that one in five shoppers say that product delivery options would improve their loyalty to their grocer.
Get the full report: Decoding Consumer Affinity: The Customer Loyalty To Merchants Survey 2022
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More