Shipt, the online grocery ordering and delivery service, has announced that it has secured $20.1 million in Series A funding that the company plans to use to expand into new markets and further compete with well-heeled online food delivery giants, like Amazon, Google and Instacart.
The funding came from investors, including Greycroft Partners, Harbert Growth Partners and e.ventures, Shipt said in a statement.
“The grocery eCommerce space is an extremely competitive environment, but in spite of the odds, Shipt has reached a dominant position in a short period of time,” Ian Sigalow, cofounder and partner of Greycroft Partners, said in a release. “We seek to partner with capital-efficient businesses that are on rapid growth trajectories and look forward to working with Shipt and playing a role in the continued advancement of the company.”
Founded and based in Birmingham, Alabama, Shipt launched in Nov. 2014, thanks to an investment from “serial entrepreneur” Bill Smith, according to TechCrunch.
Since then, Shipt has grown from its 1,000-person initial offering to ship to customers in 27 metro areas and nine states, with its rapid expansion mainly powered by word of mouth from satisfied customers. The company now has an office in San Francisco, too, that gives it a presence in Silicon Valley.
Shipt members receive “unlimited” grocery deliveries on orders of $35 or more for a $99 annual membership fee, and the company has already announced plans to add alcohol to its delivery items later this year.
“Harbert invests in emerging growth companies that are attacking high growth addressable markets and have the leadership, technology platform and operational infrastructure to deliver market differentiated results,” Bob Crutchfield, general partner at Harbert Growth Partners, said in a statement. “Under CEO Bill Smith’s leadership, Shipt has quickly become a nationally recognized company in the home grocery delivery space. We are pleased to invest in the company at this point of accelerated growth and, as they expand, to additional markets across the nation.”
Now that Shipt has secured more funding to remain competitive in the online delivery marketplace, it should be interesting to see how the battle between it, Instacart and similar delivery services shakes out.