Grocery delivery service Shipt has secured $20.1 million in Series A funding. Greycroft Partners, Harbert Growth Partners and e.ventures led the round to support the Alabama-based company's role in the fast-growing online grocery marketplace.
"The grocery e-commerce space is an extremely competitive environment but, in spite of the odds, Shipt has reached a dominant position in a short period of time," said Ian Sigalow, co-founder and partner of Greycroft Partners. "We seek to partner with capital-efficient businesses that are on rapid growth trajectories, and look forward to working with Shipt and playing a role in the continued advancement of the company."
Shipt plans to use the funding to develop partnerships with other grocery retailers, scale to new markets, invest in its team, and add alcohol delivery to its platform later this year.
Shipt partners with grocery retailers to provide members with delivery from their brands. Through the app, members select their preferred retailer, browse a full selection of grocery items and choose a one-hour delivery window. Membership costs $99 per year and members receive unlimited grocery deliveries on all orders over $35.
Since its launch in 2014, Shipt now delivers groceries in 27 cities in 10 states to more than 5,000 shoppers.
In May, Shipt partnered with H-E-B for a pilot of on-demand grocery delivery in San Antonio, and last fall joined forces with Publix to deliver in the Atlanta area.
"Over the past year, we have laid a strong foundation for our business and scaled our service across the country. This funding is the catalyst that will propel us to the next level," said Bill Smith, founder and CEO of Shipt. "We are ready to put this funding to work strategically, so we can cultivate new partnerships and continue building the best way to buy groceries."
Online grocery shopping increased by 29 percent between 2014 and 2015, with a total of 19 percent of all consumers doing their weekly grocery shopping online, according to a survey by 72 Point. Consumer demand continues to grow, as do the service providers, which include well-known names such as Instacart Peapod, FreshDirect and Amazon Fresh.
- see this Shipt press release