Food tech startups haven’t had the easiest time staying afloat the past few years. The space has been a bit crowded and has had its fair share of issues. However, there are notable exceptions.
One such exception is online grocery store GrubMarket. Founded in 2014, the Silicon Valley eGrocer platform specializes in affordable, fresh, locally sourced and organic foods. GrubMarket works through partnerships with local producers, a small number of drivers and a technology platform for easy order and payment. GrubMarket literally provides farm-to-table with a click.
“That way, the food is always fresh,” said CEO Mike Xu. “It also makes us much more nimble and able to scale our operation because we aren’t hit with this massive challenge every time we enter a market. Instead, we set up a relationship with local vendors and get moving pretty quickly. We manage logistics and communication with vendors, local small farms.”
Back in August, GrubMarket scored a $20 million Series B and plans to expand its grocery delivery services, which currently run in San Francisco and Los Angeles, to more locations in the southern U.S. later this year. According to Xu, GrubMarket has reached a $5 million monthly revenue run rate and recently broke even. Additionally, GrubMarket has plans to go public in late 2018 or early 2019.
GrubMarket faces some stiff competition in the online space, like Peapod, Good Eggs, Google Express and AmazonFresh, as well as from brick-and-mortar grocers who offer local delivery options.
But GrubMarket’s model has a few things going for it, including its propensity to build business relationships with local vendors wherever it expands. Secondly, its affordable pricing makes it more attractive to thrifty shoppers than a trip to marked-up organics sellers, like Whole Foods.
Additionally, when users buy a GrubMarket membership, they get discounts and earn points for every dollar spent, along with getting free deliveries on orders of any size. Non-members pay a delivery fee below a certain value, typically $35.