Investors proved hungry for GrubHub’s IPO, which soared over 30% in its first day of trading and notched a nice return for its backers including Benchmark Capital. And based on recent activity, venture investors are piling into the space eager to find the next winner in the food & grocery delivery space.
The jump in funding to food & grocery delivery companies looks to be part of the larger trend and increased interest in the food tech space.
Food & Grocery Delivery Financing Trend
Over the last four quarters, companies operating in the food & grocery eCommerce and delivery industry have raised nearly $486M across 109 deals globally. Notably, Q1 2014 saw funding and deal activity in the space hit the highest quarterly levels in the last five years. And investments in the space continue to pour in in Q2. In just the first 11 days of Q2, Munchery raised $28M from Shervin Pishevar’s Sherpa Ventures and SpoonRocket raised $10M from investors including General Catalyst and Foundation Capital. And Bessemer Venture Partners-backed Blue Apron, which provides a recipe and ingredient delivery service, is said to be raising new funding at a hefty valuation. Competitor Plated raised funding in Q1 of this year.
On a year-over-year basis, funding to the food & grocery delivery space has grown 51% while deal levels are up 55%.
Food & Grocery Delivery Financing Trend – By Stage
51% of all deals in the online and mobile food & grocery space has come at the seed-stage over the last eight quarters. Series A deals have captured nearly 30% of deals in the space, with YoY deal growth exceeding 100%. Late-stage deals at the Series D+ stage have taken fewer than 5% of deals in the space. A cross-section of food & grocery startups that raised early stage funding since the start of 2013 are highlighted below – including several backed by prominent VCs including Greylock Partners, Khosla Ventures and Intel Capital
Sprig – Online meal delivery service backed by Greylock Partners, Battery Ventures and Accel Partners
DoorDash – Restaurant ordering and delivery company backed by Khosla Ventures and Charles River Ventures
Goldbely – Online marketplace offering food delivery from regional establishments across the country backed by Intel Capital.
Etaoshi - China-based online catering and delivery platform backed by HIghland Capital Partners.
EAT Club – Online lunch delivery service backed by August Capital, First Round Capital and Siemer Ventures
Silicon Valley has taken about 1/5 of all deals in the market over the past eight quarters, with a number of services beginning their operations in the San Francisco Bay Area. But deal growth in the food & grocery delivery space has been driven primarily by international markets with investor-backed companies sprouting up across Europe and Asia aiming to be the local version of Grubhub-Seamless. Berlin-based Delivery Hero is among the most well-funded companies in the space, having amassed over $200M in funding from investors including Insight Venture Partners and Holtzbrinck Ventures.
A list of the most active venture capital investors in the online and mobile food & grocery space is available on the ‘Research’ tab, after logging in to CB Insights. Note: This research is only available for subscribers with access to CB Insider research.