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The Spoon

Daily news and analysis about the food tech revolution

Funding

Fridge No More Raises $15.4M for 15-Minute Grocery Delivery in NYC

Fifteen minutes is the new hour, or so it seems in the grocery delivery game. New York City startup Fridge No More announced today that it has closed a $15.4 million Series A round of funding. The round was led by Insight Partners with participation from existing investors including Altair Capital.

Fridge No More operates small, hyperlocal delivery-only grocery stores and currently serves the Williamsburg, Park Slope and Gowanus neighborhoods in Brooklyn. Typical Fridge No More stores are roughly 2,000 – 3,000 sq. ft. and house just 2,000 SKUs. The delivery radius for each store is approximately one mile, and done on scooter or bike by actual store employees. Orders are placed via iOS or Android app and are manually picked, packed and delivered to the customer within fifteen minutes.

In addition to providing super fast service, there are no minimum orders and no delivery fees. Fridge No More is able to do this because they don’t spend a lot of money on the stores themselves. Since dark stores don’t service in-person customers, they can be tucked away in cheaper locations like basements or other odd spaces, there is no checkout that needs to be set up and there are no cashiers to pay.

Another benefit of creating these smaller stores is that they can tailor the inventory to that particular neighborhood. Fridge No More doesn’t need to stock everything, it can figure out which items sell the most and stock those.

Fridge No More’s approach is similar to that of both Weezy in the U.K. and Gorillas over in Germany, both of which also raised significant funding this year.

As we’ve covered previously, the online grocery sector has been getting a lot of love from investors this year. Online grocery related startups around the world are raising lots of money. In fact, this is our second grocery e-commerce related funding announcement today (Stor.ai raised $21 million).

As we’ve also covered before, the big reason for this is the pandemic, which forced a lot of people to shift from in-person shopping to more contactless online grocery shopping. And with online grocery sales projected to reach $250 billion by 2025, I’m sure we’ll be covering a lot more announcements over the rest of this year.

One aspect worth noting is Fridge No More’s name. Obviously its hyperbole, but if these types of super-fast grocery services catch on, how will they change grocery shopping (at least in dense urban areas where a one-mile delivery radius contains a ton of business). Will people stock up on less and just have speedy delivery on speed dial? Will they just make multiple orders throughout the day if they forgot or suddenly need something?

More New Yorkers will find out soon enough as Fridge No More will use its new funding to scale up operations in that city, before moving into more locations on the East Coast.

Stor.ai Raises $21M for its Grocery Digital Commerce Software

Stor.ai (formerly Self Point), announced today that it has raised $21 million in an extended Series A round of funding. The round was led by Meitav Dash and Mizrahi Tefahot, with participation from Kli Capital.

The Tel Aviv, Israel-based Stor.ai offers a suite of tools that help grocers of any size deploy their own online shopping services. Stor.ai’s software helps manage customer data, inventory, payment and order fulfillment.

Stor.ai’s funding comes amidst a wave of capital being poured into digital grocery-related startups around the world. Since the beginning of the year we’ve seen the following raises:

In addition to startup funding, we’ve also seen increased investment in e-commerce operations from all the major grocery retailers. Walmart is working with three different vendors to add automated fulfillment to dozens of its locations. Albertsons is expanding its own use of automated fulfillment, testing robotic curbside pickup kiosks, and even piloting remote controlled robot delivery. And Stop & Shop is experimenting with its own locker pickup pilot in Boston.

The reason for all of this investment is the pandemic, which spurred record numbers of people into online grocery shopping. In January, grocery delivery and pickup hit $7.1 billion in sales. And while vaccines and warmer months may cause a market correction as people feel more comfortable shopping in-store, online grocery is projected to hit $250 billion in sales and be 21.5 percent of total grocery shopping by 2025.

For its part, Stor.ai says it will use the new funding to build out new features to its core offering, scale up its growth in North America and enter new markets in Latin America and Europe.

Instacart, Crisp, Rohlik, Flink. Online Grocery Gets Funding in the U.S. and Europe

Apparently investors have been shopping for online grocery startups, as there was a spate of funding news in the sector across North America and Europe over the last 12 hours.

Grocery delivery service Instacart raised another $265 million from existing investors including Andreessen Horowitz, Sequoia Capital, D1 Capital Partners, Fidelity Management & Research Company LLC, and T. Rowe Price Associates, Inc. This brings the total amount raised by Instacart to roughly $2.6 billion and values the company at $39 billion.

Over in the Czech Republic, online grocer Rohlik raised €190 million (~$230 million USD) in a round led by Partech with participation from Index Ventures, the EBRD, Quadrille Capital, J&T Bank, R2G, and Enern. According to TechCrunch, Rohlik offers items that it buys itself wholesale, as well as offering goods in concert with existing retailers. The company will use the funds to expand across its existing service areas (the Czech Republic, Hungary and Austria) and into new markets (Germany, Poland, Romania).

In the Netherlands, Dutch grocer Crisp announced that it has raised a €30 million (~$36 million USD) Series B round of funding led by Target Global with participation from Keen Venture Partners and others. EU-Startups reports that Crisp offers fresh seasonal ingredients sourced locally and delivered in one hour across the Netherlands. This brings the total amount raised by Crisp to €46 million (~$55 million USD) since 2018.

And finally, German delivery-only grocer Flink announced that it has raised $52 million in seed funding. TechCrunch writes that Target Global led this funding as well, along with participation from Northzone Cherry Ventures and TriplePoint Capital. This brings the total amount raised by Flink to $64 million, as the company is expanding beyond Germany and into France and the Netherlands.

Investment in the online grocery space has been frothy since the start of the year. In the U.K., Weezy raised $20 million. Here in the U.S., Good Eggs raised $100 million and Imperfect Foods raised $110 million. But all these deals pale next to Chinese grocery app Xingsheng Youxuan, which raised $2 billion.

Why so much money? Partly it’s because the pandemic and limited trips outside our homes pushed people into record amounts of online grocery shopping last year. But as we’re a year into this pandemic, new habits around online grocery have formed. In the month of January, U.S. consumers spent $9.3 billion on grocery e-commerce, and online sales of food and beverages is projected to hit $143 billion by 2025. In other words, the market for online grocery markets is looking pretty super right now.

AgFunder: Record-breaking $31B Invested in Agrifood Tech in 2020

Ag tech VC firm, AgFunder, released its annual report on agrifood tech funding today. Companies in this sector raised $26 billion in 2020, a 15.5 percent increase over 2019. If that wasn’t enough, AgFunder actually expects that already record-breaking figure to bump up to $30.5 billion as more deals done in 2020 are revealed.

The AgFunder 2021 Agrifoodtech Investing Report breaks the agrifood tech sector into “upstream” companies, which are closer to the farm, and “downstream” companies, which are closer to the consumer. AgFunder said that for the first time on record, upstream companies outraised downstream companies in 2020. Those upstream companies pulled in $15.8 billion across 1,950 deals, while downstream companies raising $14.3 billion across 1,142 deals.

AgFunder also found that alt-protein/novel ingredient/functional food companies raised $2.3 billion across 26 deals, and that e-grocery was the most funded downstream category, raising $5.1 billion across 119 deals. AgFunder noted that the agrifood tech sector is maturing, with startups at both growth and late stage raising larger deals than ever before.

“This is no longer seen as a niche, experimental and risky sector, highlighted by the increase in the median size of growth stage and late stages deals,” Louisa Burwood-Taylor, head of media & research at AgFunder, said in today’s press announcement. “Investors piled in despite Covid; the first wave of innovators in each category are now mature and able to raise huge rounds with many household names such as Impossible Foods; and the second wave of innovators is now raising much larger rounds than the first wave did at the same stage.”

What’s interesting about that statement is that AgFunder positions this growth in agrifoodtech as being in spite of the pandemic. While the pandemic has inflicted enormous economic difficulties around the world, it also seems like there was increased investment because of the pandemic. Downstream technologies in particular benefited as restaurants and grocers all accelerated adoption of systems that reduced human-to-human interaction and helped meet the rising demand for e-commerce to get our food.

AgFunder’s report reinforces earlier data showing the increased investment in food tech in 2020. Pitchbook said that a little more than $12 billion was invested in food tech companies last year. There is probably some definitional and scope differences between the two reports, but the broader point stands. Food tech companies raised a ton of money last year, and with the pandemic still very much a part of our lives, the breakneck pace of investment will continue in 2021.

Blackbird Foods Secures $1.5M For High Protein Wheat-Based Meat Alternative

New York-based Blackbird Foods, which produces its own version of high-protein meat alternative seitan, announced last week its first close of a $1.5 million Seed round of funding. According to a press release sent to The Spoon, the round was led by Lever VC, and Blackbird plans on using the funding to scale operations and expand into retail chains.

Emanuel Storch, Blackbird Foods CEO, told me by phone this week that the company was started by vegan chefs and restauranteurs in the New York area who were looking to create a high quality, high-protein, versatile alternative to meat they served in their own restaurants.

Seitan is a traditional ingredient used for meat alternatives, and it is cherished for its high protein and low-fat content. Sweet Earth, a company now owned by Nestlé, produces a variety of different vegan seitan-based products including deli meats, pepperoni, and seitan strips. Upton Naturals is a vegan company know for its jackfruit and seitan meat alternatives, and the company produces seitan-based hot dogs, bacon, and grounds.

Storch said that Blackbird Foods’ seitan is very different from other seitan on the market because Blackbird extracts protein directly from wheat flour, while other companies typically just use hydrated gluten powder. According to Storch, that hydrated gluten powder method can cause seitan to have a rubbery or mushy texture, whereas Blackbird Foods’ seitan more closely resembles the texture of meat.

Blackbird Foods currently has four different flavors of seitan, including original, Texas BBQ, chili lime, and rosemary garlic. Each serving of seitan contains 17g of protein. In addition to seitan, the company also produces four flavors of frozen vegan pizza (Margherita, kale-mushroom, BBQ, and supreme) which uses Violife’s vegan cheese. Storch said the company’s target market is vegans because this demographic is the “low-hanging fruit,” because vegans have already adopted seitan, but it also aims to reach flexitarians.

Blackbird Food’s seitan costs $5.99 per pack and contains three servings. The frozen pizzas cost between $7.99-$9.99, and each pizza also contains three servings. The company’s products are available for purchase on its website, and in-store at retailers such as Erewhon, Mom’s Organic Market, and many independent retailers within the New York area.

Foxtrot Market Raises $42 Million for Its Corner Store and One-Hour Delivery

Corner store and café chain Foxtrot Market announced today that it has raised a $42 million Series B round of funding. Alamanac Insights and Monogram Capital Partners led the round with participation from David Chang, Imaginary Ventures, Wittington Ventures, Fifth Wall, Lerer Hippeau, Revolution’s Rise of the Rest Seed Fund, M3 Ventures, The University of Chicago, Collaborative Fund, Wasson Enterprise, Bluestein Ventures, and Barshop Ventures.

Foxtrot launched in 2014 and in addition to being an “upscale” corner store, the business has app-based purchasing and makes its entire inventory available for delivery in under one hour. According to today’s press announcement, last year company sales increased more than 100 percent year-over-year.

On its website, Foxtrot currently lists 10 open locations across Chicago, IL and Dallas, TX, with two more coming to the Washington, D.C. area. With its new funding, Foxtrot said it expects to double its store count by the end of the year, adding as many as nine stores in Chicago and Dallas, along with further expansion into D.C. The new money will also go towards expanding its line of private label packaged goods and gifts, and further investment in its nationwide shipping.

As mundane as they may be in our everyday lives, the convenience store is going through a bit of a renaissance right now. DoorDash is not only delivering from convenience stores, but also building out its own line of delivery-only convenience stores. Also, more convenience stores are adopting new technology like cashierless checkout, thanks to startups like AiFi, Grabango and Zippin.

Foxtrot is also part of another trend we’re seeing at The Spoon: investment in speedy delivery. Over in Europe, both Weezy in the U.K. and Gorillas in Germany got funding in the past few months for their fast, corner store-like deliveries. Here in the U.S., GoPuff bought BevMo to expand its sub-30 minute delivery network.

The pandemic accelerated our need for delivery, and it looks like convenience and corner stores are definitely stepping up to deliver.

Pairwise Raises $90M Series B for its CRISPR Food Tech

Pairwise, which uses CRISPR technology to enhance fruits and vegetables, announced today that it has raised a $90 million Series B round of funding. The round was led by Pontifax Global Food and Agriculture Technology Fund (Pontifax AgTech) and existing investor Deerfield Management Company. Temasek and Leaps by Bayer also participated in the round, which brings Pairwise’s total funding to $115 million.

CRISPR is an exciting new field in food and ag tech. As Spoon Founder Mike Wolf wrote last year:

Food scientists around the world are using CRISPR tools to create food that is more disease resistant and tastes better, as well as utilizing the technology to save crops that might be at risk due to climate change.

Pairwise is using its CRISPR technology to improve five different types of produce, including mustard greens. Mustard greens are a high-yield crop with a strong nutritional profile, but their pungent smell and bitter taste prevents them from being a dinner plate staple. Pairwise aims to develop mustard green that gets rid off these not-so-great parts of the green so it too, can be an additional crop grown for consumption.

In addition to greens, Pairwise is working on improved berries and cherries. The applications of Pairwise’s technology go beyond eliminating bad odors and tastes. The company promises that CRISPR will allow it to also improve the shelf life, yield and seasonal availability of fruits and vegetables.

There are still regulatory hurdles to overcome for CRISPR-based foods. Unlike genetically modified foods, CRISPR is not introducing anything new into the genes of a plant (or meat). It is simply working with the material that is already present.

But still, it is uncharted territory. At the end of last year, the USDA sent out a proposed rule change that would have it oversee gene-edited animals instead of the FDA. So look for the regulations around CRISPR-based food to crystalize over the coming year.

Pairwise said its first product “is expected in 2022.”

Vivino Raises $155M Series D for its Wine App and Online Marketplace

Mobile wine app and online marketplace, Vivino announced today that it has raised a $155 million Series D round of funding. This round was led by investment firm Kinnevik and Sprints Capital, with participation from GP BullHound and Creandum. This brings the company’s total funding to $221 million USD.

This most recent round of funding will be used for Vivino’s continued geographical expansion and to incorporate more personalized AI (artificial intelligence) into its platform. The company will focus its expansion efforts in markets in the US, UK, Germany, Portugal, and Japan. Its AI will be improved to create better wine recommendations for its customers.

Vivino’s community can use the mobile app or online marketplace to see reviews and ratings of different wines, and view personal recommendations based on their preferences. Customers shop for wine online through the website marketplace or app, and have wine shipped directly to their homes. Vivino allows the customer to shop for wine based on grape or region, and offers wine pairing recommendations for a variety of foods. Once the wine delivery arrives, customers can use the accompanying app to scan each bottle and receive additional information about the wine. For those unsure which bottle of wine to pick out, Vivino uses its AI-based recommendation platform to make suggestions.

E-commerce alcohol sales have significantly increased since the start of the pandemic, and this sector seems to be having its moment. Vivino’s fundraise comes just one day after alcohol delivery service and online marketplace Drizly was purchased by Uber for $1.1 billion.

Currently, 50 million people worldwide are part of the Vivino community of wine drinkers. The Vivino app is free, and available for both Apple and Android phones.

Online Grocer Good Eggs Raises $100M, Plans Southern California Expansion

Online grocer Good Eggs announced today that it has raised $100 million in new funding. The round was led by Glade Brook Capital Partners with participation from GV, Tao Invest, Finistere Ventures, and Rich’s, as well as existing investors Benchmark Partners, Index Ventures, S2G, DNS Capital, and Obvious Ventures. This brings the total amount raised by Good Eggs to roughly $170 million.

This new funding comes after a record-breaking year for online grocery sales thanks to the pandemic. While the numbers have tapered off from their highs, the various pandemic lockdowns have lasted long enough for shoppers to form new grocery-buying habits. The online grocery market is projected to grow over the next four years and take up 21.5 percent of total grocery sales.

Bentley Hall, CEO of Good Eggs, told me during an interview this week that his company has benefited from this growth in online grocery. Hall said that in 2020 Good Eggs, which currently only operates in the California [SAN FRANCISCO] Bay Area, moved to a bigger warehouse facility, hired more than 400 new employees and saw its revenues surpass $100 million.

As part of today’s announcement, Good Eggs also said it has appointed Vineet Mehra as the company’s new Chief Growth and Customer Experience Officer. Prior to Good Eggs, Mehra was Global Chief Marketing Officer and Chief Customer Officer at Walgreens Boots Alliance. Mehra will oversee Good Eggs’ expansion into Southern California.

Hall didn’t specify where in Southern California his company would be expanding to first, only saying that by the end of 2022 Good Eggs would be serving two of the following three regions: Los Angeles, Orange County and Northern San Diego.

The boom in online grocery is bringing with it increased competition for Good Eggs. The company will face pressure from giants that are greatly ramping up their grocery activities. Walmart is adding more automation to fulfill online grocery orders faster and Amazon has already opened six physical Fresh supermarkets around Los Angeles/Southern California.

Hall indicated that the company isn’t currently looking at automation at its facility to speed up order fulfillment, but he does see a future where the company offers curbside pickup options in addition to its delivery program.

Saudi Arabia: FOODICS Raises $20M for is Restaurant Management Platform

FOODICS, which makes restaurant management software, announced today that it has raised a $20 million Series B round of funding. The round was led by Sanabil Investments (a firm wholly owned by Saudi Arabia’s Public Investments Fund) and STV, with participation from Endeavor Catalyst and Elm & Derayah. This brings the total amount of funding raised by FOODICS to $28 million.

Based in Saudi Arabia, FOODICS offers a suite of restaurant management features that includes a cloud-based point-of-sale system, as well as iPad-compatible apps for inventory management, employee timesheets, digital menus, analytics, and a kitchen display system. According to the company’s website, FOODICS has more than 7,000 customers and has processed more than one billion orders.

The global pandemic has wreaked havoc on the restaurant industry, decimating sales, forcing the closure or reduction of dine-in eating capacity and shuttering thousands of businesses. But at the same time, it has created new opportunity for restaurant software platforms like FOODICS.

As digital ordering becomes more and more the norm and restaurants shift their focus to off-premises meal formats (e.g., takeout, delivery), software platforms can help with that transition. There is a need for coordinating orders, integrating orders with third-party delivery systems and expediting meals once they are ready. Software can also provide valuable data on customer ordering and experiences that can assist restaurants in becoming more efficient.

There are a number of players such as Toast and Olo in the restaurant software space that have been adapting their platforms to new pandemic realities over the past year. Toast, for example, saw its valuation practically double over the course of 2020, and could potentially IPO this year.

With its new funding, FOODICS says it will expand its share in existing markets, accelerate its international presence and expand its Fintech offering.

Imperfect Foods Raises a $95M Series D Round

Imperfect Foods, a national online grocer that specializes in selling surplus and cosmetically “imperfect” foods, announced today that it has raised a $95 million Series D round of funding. The round was led by Insight Partners and brings Imperfect’s total amount of funding to $214.1 million.

Imperfect Foods (formerly Imperfect Produce) aims to reduce waste in our current food system by “rescuing” so-called ugly foods — think misshapen carrots or potatoes — and selling them directly to consumers at a discounted prices. Without these rescues, such food would go straight to the landfill, further contributing to the world’s multibillion food waste problem.

In 2020, Imperfect transitioned from a regional produce delivery service into a national full-service grocer, expanding its catalog to include pantry items, meat, seafood, dairy and other products. Items sold are surplus, cosmetically imperfect, or sourced from sustainable partners. Some examples from last year include buying up allotments of cheese plates going unused by airlines and popcorn kernels from empty movie theaters. Imperfect also released a holiday snack box at the end of 2020 that featured cosmetically imperfect but otherwise perfectly edible snack items.

Imperfect said in today’s press announcement that it has a growing customers subscriber base of more than 350,000 customers. But it’s not alone in the “ugly” food space. Misfits Market, which does much the same thing, has raised more than $100 million in funding.

That money is flowing into Imperfect and Misfits is not too much of a surprise. The global pandemic pushed record numbers of people into online shopping. Even though vaccines are now out, and we may be seeing the pandemic recede, grocery e-commerce is projected to remain sticky with consumers and grow to gobble up 21.5 percent of overall grocery spending by 2025. So having an established grocery delivery infrastructure right now is far from an imperfect business idea.

Weezy Raises $20M Series A for Fast Grocery Delivery

UK-based speedy grocery delivery service Weezy has raised a $20 million Series A round of funding. TechCrunch was first to report the news, writing that the round was led by New York-based Left Lane Capital, with participation from DN Capital, existing investors Heartcore Capital and angel investors. Today’s funding announcement follows a $1 million pre-Seed round raised by Weezy in August of last year.

Weezy promises grocery delivery in as little as 15 minutes, thanks to its network of smaller fulfillment centers that are nestled within neighborhoods, closer to shoppers. Orders are then delivered via a network of its delivery people riding electric scooters or bicycles.

Weezy operates in London and will use the cash to expand to more neighborhoods in that city and across the U.K. As TechCrunch notes, the presence of a U.S.-based lead investor could indicate that a hop across the pond to the states could be in the offing.

Speedy European grocery delivery appears to be a sector that’s heating up for venture capital. Last month, Germany-based Gorillas raised $44 million for its similar, smaller fulfillment center approach to grocery delivery.

Here in the U.S. we see companies such as Fabric building out small automated grocery fulfillment centers and DoorDash building out a network of dark convenience stores that are delivery only.

It’s no wonder that money is flowing into online grocery services. The pandemic pushed record amounts of people into e-grocery shopping last year. With the virus still raging across the globe and subsequent lockdowns, online grocery shopping remains sticky with consumers, who are now habituated to new purchasing behaviors.