The USDA estimates over 10% of US households experienced food insecurity in 2020, with that number rising steadily in 2021. So when we were presented the opportunity to invest in GrubMarket—a software company that eliminates barriers in the food distribution industry— we immediately were intrigued.
Mike Xu, Founder & CEO of GrubMarket, founded GrubMarket in 2014. He went from the garage to a Venture Capital-backed and Y Combinator-backed startup in a few months. While GrubMarket initially set out to provide a more efficient farm-to-table service to consumers, they quickly discovered the many hurdles it took to get food from the farm to the market. One thing became clear: the supply chain for getting fresh produce is broken.
Rather than seeing a closed-door, Mike saw a more significant opportunity: fix the problem by managing those relationships through software.
Now several years later, the startup still serves consumers, but it’s no longer the primary focus. Instead, the heart of GrubMarket’s mission is now its focus on helping companies that benefit consumers by providing both the software and the services that help connect and manage relationships between food suppliers and their customers, including wholesalers and other distributors, markets and supermarkets, delivery startups, restaurants, and consumers.
Their mission to create the best grocery experience possible by regularly offering a spectacular array of farm-fresh foods at more affordable prices than other competing options was tremendously well received, and GrubMarket picked up $120M in a Series E round of funding. The company is now at a $1 billion annualized run-rate, having grown revenues 300% over the last year.
Our motto at Builders + Backers is “disrupt to democratize”: focusing on technologies and companies building around the digital area. We aim to remove the go-between and connect creators of things with the value they're creating. It’s clear to us that GrubMarket is America’s largest and fastest-growing food supply chain eCommerce company, heading to disrupt and digitally transform the way food is distributed, and we're excited to be a part of the process.
Our Founder & CEO of Builders + Backers, Donna Harris, believed in eliminating fresh food barriers nearly a decade ago when she was a part of 1776 Ventures' investment in Twiga Foods. "The goal of innovation and technology should be to remove unnecessary inefficiencies," Harris says. “Sometimes the inefficiencies are so deeply embedded it's hard for people experiencing them to realize it's an inefficiency. “When you get fresh ideas — especially from someone coming in that didn't know about them — they fuel the power of innovation and remove entrenched efficiencies. We like to see what GrubMarket is doing in the U.S."
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