President Donald Trump's widespread tariff hikes have already resulted in reduced growth forecasts amid an uncertain public mood. But on Tuesday, one food e-commerce startup, Grubmarket, seemed impervious to these macroeconomic concerns. It announced a new $50 million share round at a valuation of over $3.5 billion.
Funding Round – Series G includes participation from 3spoke Capital, Joseph Stone Capital, Liberty Street Funds, Pegasus Tech Ventures, Pinegrove Capital Partners, Portfolia, and Roc Venture Group.
In the food secondary market, which is estimated to be worth around $1 trillion a year, Grubmarket's valuation is rising rapidly behind the growing balance sheet. The US business has acquired its position as an online farmers market connecting North American consumers with local fresh produce suppliers, and its headline ambition to digitally transform the American food supply chain industry.
The last Grab Market Round we covered was Series E, which raised $120 million in 2021 at a valuation of $1.2 billion. A year later, we sourced Series F for each pitchbook. It attracted $120 million at a $2 billion valuation. (Note: Series G detailed in last year's Pitchbook is incorrect.)
Other investors in the company include Battery Venture, Tiger Global, Y Combinator and more (there are cap tables with over 100 names on the Pitchbook).
Grubmarket itself is a huge food distribution business through farm-to-fork proposals, but in this latest stock fund pay raise, the money says it has a special focus on AI to build more technology to improve the way customers guess it. Grubmarket wants to use AI to help its customers process a lot of data. Many of them combine offline formats such as voicemail and post-it notes.
We are looking at bigger acquisitions
We understand that Grubmarket is currently on track to generate revenue of $2.4 billion this year (it was $2 billion in 2024). CEO and founder Mike Xu said in an interview that he will make profits on an EBITDA basis.
With Food e-Commerce World integrated, he also said Grubmarket will use some of its cash to make more acquisitions for both the startup and more legacy businesses. “As Grubmarket grows, we have the opportunity to deal with larger acquisitions,” he said. “The industry has always had all the wholesale and distributor sizes. They need to leave when owners are older or want to embrace new technology. They make changes as a result.”
Food is of course a fundamental need, but in a rich country like the United States, it is also a big fixture with entertainment. Thanks to a huge boost to channels such as social media and television.
Companies that can square their demand with supply and strong unit economics can cause killings.
Originally named as a healthy food procurement and distribution startup, Grubmarket took a technology-first approach to working with different groups of farmers and other producers to deliver products to buyers, a handful of giants like most retailers and all food products.
Over time, it further strengthened its food distribution business – its revenue and valuation became increasingly high, especially as it saw the rise in trade during the peak of Covid-19. Recently, they have begun scooping up a variety of other occasionally broken food distribution startups (like good eggs) to build a profile to deliver directly to consumers.
(Note, its cost reduction and integration seems to be working. A good egg is at the end of the runway, and all options were exhausted when Grubmarket bought it. Today, it's beneficial, Xu told TechCrunch.)
With around 12,000 employees now, Grubmarket is spreading its wings by bringing technology and business models to more countries. In addition to being active throughout the US, it is located in Argentina, Canada, Chile, Colombia, Egypt, India, Mexico, South Africa and Spain, and is planning to go further. The procurement and distribution networks say it covers around 70 countries overall.
Keep focused
For now, at least, Xu is either pretty optimistic or has comments on Trump's tariffs and how it will affect his business. (It has a clear meaning at least in terms of higher prices, potential supplier collapse, and lower demand.)
But as Xu has said so far, it's rarely directly affecting logistics and tariffs on the produce and other foods Grubmarket trades, it's a normal business for the company for now.
In the meantime, he will focus on AI and other technologies. He believes that the 21st century will be the basis for any version of a big or small industry, big or small.
Last year, he said that Grubmarket released “really comprehensive” enterprise AI software for the food supply chain industry. This includes the components that provide business intelligence, the AI analysts that help customers plan and manage cash flows, and the third AI, essentially an ordering assistant.
The latter actually utilizes the way the food supply industry is in line with a variety of modalities. Producers, wholesalers, other distributors and logistics companies belong to a huge amount of data, but the majority of them still come through unstructured, highly offline modes, including voicemail messaging, paper scraps, and texting on many platforms.
The purpose of an AI assistant is to take everything that comes in and make it a common form that is used throughout the rest of the system. Xu said many components have patents or applications filed, highlighting the seriousness of their business efforts.
Xu is not based on what the next step in Grubmarket is and whether they can include public lists. In any case, the recent market appears to be open to as many scaled startups as they stay private and relax quasi-fairness arrangements or buy back shares to see the list at IPOs.
“Grubmarket has grown rapidly into a leading food technology company by leveraging best-in-class AI-powered software solutions and powerful operational areas,” said Kevin Moss, president of the Private Equity Fund and MD President of Liberty Street Advisors. “The growth and size of the company is supported by its established business foundations and commitment to sustainability, which benefits farmers in California and the US.
“Through AI Enterprise Solutions, Vertical SaaS operational software and sustainable innovation in its ecommerce platform and ecosystem, Grubmarket has become a pioneer in transforming the US dollar's US food supply chain industry.”