U.S. President Donald Trump’s extensive tariff increases are causing growth forecasts to be reduced amidst an uncertain public atmosphere, which is expected to eventually influence the technology sector as well. However, on Tuesday, the food e-commerce startup GrubMarket appeared unaffected by these economic concerns, as it announced a $50 million equity round at a raised valuation exceeding $3.5 billion. This development highlights how some tech companies continue their expansion plans undeterred by surrounding challenges.
The Series G funding round saw participation from 3Spoke Capital, Joseph Stone Capital, Liberty Street Funds, Pegasus Tech Ventures, Pinegrove Capital Partners, Portfolia, ROC Venture Group, and other unnamed investors.
GrubMarket, positioned in a food distribution market valued around $1 trillion annually, has experienced rapid growth, bolstered by an expanding balance sheet. The U.S.-based company operates as an online farmers market, linking North American consumers with local fresh produce suppliers, aiming to revolutionize the U.S. food supply chain industry through digital transformation.
Previously, GrubMarket raised $120 million in a Series E round in 2021, achieving a $1.2 billion valuation. The following year, as per PitchBook, it completed a Series F round, securing $120 million at a $2 billion valuation. Notably, the Series G information on PitchBook from last year was incorrect.
The company’s list of investors has also included Battery Ventures, Tiger Global, and Y Combinator, among others, with over 100 names listed on PitchBook.
GrubMarket, a substantial player in food distribution with its farm-to-fork model, plans to use the recent funds to develop technology to aid customer business management, emphasizing artificial intelligence (AI). The company aims to help clients handle vast amounts of data, much of which comes from offline sources like voicemails and post-it notes.
GrubMarket is currently projected to generate $2.4 billion in revenues this year, up from $2 billion in 2024. CEO and founder Mike Xu mentioned in a discussion that the company is profitable based on EBITDA.
With the food e-commerce space consolidating, Xu indicated that GrubMarket would utilize some of its available capital for additional acquisitions, targeting both startups and more established businesses. He noted the opportunities that arise as the company grows, offering exits to wholesalers and distributors facing transitions.
As food remains a staple but also a significant interest in wealthy countries like the United States, firms managing to align demand with supply alongside robust unit economics can thrive.
Originally known as a health-focused food distribution startup, GrubMarket adopted a technology-driven strategy to connect farmers and producers with buyers, including small retailers and large entities like Whole Foods.
Having expanded its food distribution scope, particularly during the height of the COVID-19 pandemic, GrubMarket has seen its revenue and valuation soar. It has recently begun acquiring various struggling food distribution startups, such as Good Eggs, aiming to bolster its profile in direct-to-consumer delivery.
Currently, with approximately 12,000 employees, GrubMarket is broadening its technology and business model across more countries. It operates not only in the U.S. but also in Argentina, Canada, Chile, Colombia, Egypt, India, Mexico, South Africa, Spain, and beyond, spanning a procurement and distribution network across about 70 countries.
As of now, Mike Xu has expressed minimal concern over President Trump’s tariffs’ potential impact on GrubMarket’s operations or the broader food distribution network. He indicated that few measures have directly influenced logistics and tariffs related to GrubMarket’s produce and other food items, allowing the company to continue its usual activities.
Xu remains focused on AI and technological advancements, considering them critical to the future of the industry. In the past year, GrubMarket introduced comprehensive enterprise AI software for the food supply chain sector, assisting with business intelligence, cash flow management, and serving as an ordering assistant.
Xu did not disclose future plans for GrubMarket, including any prospects for a public listing. The current market climate favors both private evolutions into quasi-private-equity structures and potential IPOs.
Kevin Moss, president of The Private Shares Fund and MD of Liberty Street Advisors, stated, “GrubMarket has rapidly grown into a major food technology company by leveraging best-in-class AI-powered software solutions and strong operational discipline. The company’s growth and scale are supported by established business fundamentals and a commitment to sustainability, benefiting farmers in California and across the U.S.”
Moss further highlighted GrubMarket’s pioneering role in transforming the trillion-dollar American food supply chain industry through continuous innovation in AI enterprise solutions, vertical SaaS operational software, and its eCommerce platform and ecosystem.
