FreshDirect Raises $189 Million In Venture Funding

FreshDirect, which has been delivering groceries to people on the East Coast for some time now, has raised $189 million in additional venture funding.

According to a report, the round was led by JPMorgan Asset Management, with W Capital and AARP Innovation Fund investing as well. The fresh round of funding will be used to help the company increase its manufacturing capacity and expand into new geographies. Currently, FreshDirect ships to New York, New Jersey, Pennsylvania, Connecticut and Delaware.

The company recently rolled out FoodKick, which is one-hour delivery in selection locations, underscoring how consumer expectations for fast delivery are increasing. In the report, FreshDirect CEO Jason Ackerman said the one-hour delivery service will likely be a “pivotal” part of the company’s business. FreshDirect is “seeing a huge expansion of our customer base,” because of FoodKick, he said.

While FreshDirect isn’t the first food delivery service — nor will it be the last — the company contends it stands out from the rest because it has good financials and around $600 million in revenue. The company is profitable and growing, noted the report.

As for competition from Amazon, which has disrupted pretty much every market it has entered, Ackerman said he isn’t concerned. “We’ve been competing with Amazon for a while now … and we’ve continued our growth rates all the way through,” said the executive, noting there is room for more than one player in a market which he thinks will become a trillion-dollar industry in the future. FreshDirect previously raised more than $90 million in VC funding, noted the report. When it comes to the food delivery market, it is already getting crowded with some heavy hitters and new startups entering the space. Even Uber is getting in on the action with its UberEATS service.