GrubMarket breaks even and looks at expansion
- GrubMarket, an e-grocery concept backed by Ashton Kutcher’s Sound Ventures, has reached a $5 million monthly revenue run rate, and has hit the break even point on its business overall, Mike Xu, founder and CEO told Tech Crunch.
- Currently, GrubMarket offers grocery delivery services in San Francisco and Los Angeles, and plans to expand into the southern U.S. in 2017. The service is currently looking at places like major metro areas in Texas and Tennessee.
- GrubMarket raised $20 million in its last round of funding and employs approximately 70 full-time employees. It is aiming to go public by late 2018 or early 2019.
A recent report by Statista revealed that the majority of grocery shopping still takes place in brick-and-mortar stores because people have been reluctant to buy online. Many tech-savvy retailers are offering delivery options for their customers now, in the grand tradition of the milkmen of yesteryear.
GrubMarket works directly with farmers get favorable rates on products ,which include everything from meat and produce to shelf-stable pantry items. Sellers can list their products for free on GrubMarket; the service takes a commission for delivery.
According to Morgan Stanley Research, 13% of consumers say they haven’t purchased groceries online because delivery takes too long. A concept where delivery is done quickly would put it a step ahead of competitors such as online grocery delivery services AmazonFresh, FreshDirect, and Peapod.
GrubMarket's sales team also works to retain and attract customers, with employees earning bonuses for business. This is a departure from the online-ad-heavy way other online retailers do business. Clearly, adding the human touch is important. Statistics show that most online ads are seen, but not clicked on. Personal relationships, however, have been important to growing businesses since times before technology.