Report: Good Eggs Secures Critical Capital At Significant Markdown
Good Eggs has raised a new round of capital to help keep the struggling online grocer operating.
“In a difficult environment, we are glad we’ve raised additional capital from great partners,” CEO Bentley Hall told NOSH via email. “This lets us continue driving down a clear path to enduring profitability and, most importantly, serving our loyal customers.”
According to a story on The Information, which cites two people with knowledge of the deal, Good Eggs raised $7 million from existing investors with a pre-investment valuation of $15 million, a 94% drop from late 2020 when the company raised $60 million at a pre-investment valuation of $270 million (part of a larger $100 million round announced in 2021). A down round, such as this, would greatly reduce the value of the shares owned by previous investors such as Benchmark Capital, which did not contribute more capital to the current fundraise, according to The San Fransisco Business Times.
In total, the 12-year-old company has raised over $180 million from investors including Glade Brook Capital Partners, GV (the investment arm of Google), Tao Capital Partners, Finistere Ventures, Benchmark Partners, S2G and Obvious Ventures.
After coming back from near-bankruptcy in 2015, the Bay-Area based company was able to grow revenue to more than $100 million in 2021, up from $59 million in 2019, that fell to $86 million in 2022, The Information reported. To stem losses, the story continued, the company has dropped its cash burn by $1.5 million to $1 million per month.
Good Eggs declined to share any financial details about the transaction or its current performance. Glade Brook also did not reply to a request to comment.
Good Eggs had already retrenched once before, pulling pack from its initial national ambitions to focus solely on its San Francisco customers before expanding to shoppers in the wider South Bay, Oakland, and Southern California, with new distribution centers in each location. A forecasted jump into another state would necessitate further investments in infrastructure.
Late 2022, Good Eggs also launched a long-awaited D2C storefront, Good Eggs Select, allowing customers nationwide to purchase from a curated selection of items.
The company has been grappling with leadership turnover. Director of expansion Matt Miller, VP of growth Daniel Lysaught and head of customer experience Emily Van Meter all departed the company over the last year, with most serving less than two years at the retailer. Tasked with expanding the retailer’s customer base and sales, chief growth, product and CX officer Vineet Mehra, departed in June 2022, just 16 months after he joined the company.
In the last three months COO Kiran Vinta and senior category manager Scott Owen have also left Good Eggs. At the company for only a year, Owens oversaw category management (aside from produce, meat and seafood), assuming much of these responsibilities following a reduction of the category management and buying teams.
Many high profile online retailers have struggled to maintain the level of rapid growth they enjoyed during the COVID-19 pandemic when shoppers looked to avoid crowded brick and mortar stores. GoPuff, Misfits Market and, most recently Drizzly, have all also experienced reductions in force while Instacart, which has been eyeing an IPO, slashed its own valuation.
