Tyson Foods was right –– food supply chains are breaking. In many grocery stores, the shelves are as bare as they were during the early pandemic stockpiling frenzy. At the same time, world food prices hit a 10-year high in October, according to the Food and Agriculture Organization’s food price index.
The problems within the food supply chain extend from sourcing to delivery and everywhere in between, resulting in shortages and price hikes that are impacting millions of Americans that rely on food banks, food pantries and even traditional grocery stores.
Fixing these issues will take a massive amount of time, money and energy, but food technology company GrubMarket is trying to take the lead on repairing a fractured food supply chain. The Bay Area-based unicorn just closed a $200 million Series E funding round led by Tiger Global Management that pushed its valuation to $1.2 billion as it continues to invest in the path from farm to table.
Participants in the Series E also included BlackRock, Liberty Street Funds, Apeira Capital, Japan Post Capital, Celtic House Asia Partners, We Capital, Walleye Capital and several unnamed backers.
GrubMarket has been on a tear over the past two years, completing a whopping 31 acquisitions, 11 of which have come since June. The company’s purchases have primarily been of regional food wholesalers and suppliers, but its most recent acquisition of Oakwood Transportation showed that the company is ready to invest more into logistics.
“GrubMarket is digitally transforming the trillion-dollar, highly fragmented, old-school food supply chain. They are executing a disciplined, profitable strategy and introducing modern software to the industry. We look forward to being a part of GrubMarket’s journey to improve the efficiency and sustainability of the American food ecosystem,” said Griffin Schroeder, partner at Tiger Global Management.
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GrubMarket’s proprietary technology is an e-commerce platform that centers around the producer, offering inventory and price management, financial integrations, real-time activity monitoring, customer relationship management and a host of other features. Its customers include grocery stores, restaurants, offices, online food delivery companies, farms and individual consumers.
Currently, GrubMarket’s largest regional presences are in the Northeast, Texas and on the West Coast, but it also operates in Arizona, Georgia, Michigan, Missouri, Pennsylvania and British Columbia, with plans to expand to other parts of the U.S. and Canada. This year alone, the company has seen 300% growth in e-commerce and 3,500% in sales of its SaaS technology while maintaining net profitability, according to GrubMarket CEO Mike Xu.
“Moreover, GrubMarket is aiming to debut on the public market within the next 11 months or so,” said Xu. “In the next two to 10 years, GrubMarket will also play a critical role in reviving the food ecosystem in the Midwest and addressing the demographic inequalities surrounding access to fresh, healthy food, between the West Coast, East Coast and central regions of the U.S.”
The additional $200 million in funding will help GrubMarket gear up for an IPO, for which the company will file the provisional paperwork by summer 2022, Xu told TechCrunch in September. GrubMarket’s data-driven approach to repairing food supply chains has attracted the interest of investors, who have poured a total of over $500 million into the company over eight funding rounds.
“Under Mike’s vision and exemplary leadership, GrubMarket is well on its way to transforming food distribution through vertical integration of the supply chain with best-in-class technology,” said Natalie Hwang, founder and managing partner of Apeira Capital Advisors. “We are inspired by both the company’s mission of creating sustainable, data-driven distribution to unlock value for a massive yet inefficient industry, as well as its impressively disciplined approach of driving aggressive but profitable scale to build a durable franchise. GrubMarket represents an extraordinarily rare breed of company that Apeira Capital is privileged to partner with and to support in its next phase of rapid, nationwide expansion.”
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