GrubMarket Acquires Good Eggs
Food tech company GrubMarket has acquired distressed online grocery platform Good Eggs in the latest example of a highly competitive market for ecommerce food delivery companies.
The terms of the deal have not been disclosed, but TechCrunch reported that it is an all-stock transaction.
GrubMarket-owned Daylight Foods COO Keith Brewer will reportedly take over the leadership role at Good Eggs.
Founded in 2011, San Francisco-based Good Eggs has been struggling since it peaked alongside other grocery delivery platforms during the pandemic. In March 2023, the company raised a down round of $7 million as it struggled to stay afloat. The company had previously announced the closure of a $100 million investment in 2021.
The writing might have been on the wall for Good Eggs for some time. Last August, the company parted ways with Bentley Hall, its CEO for nearly eight years, and installed former Uber executive Rodrigo Arévalo as chief executive.
The two companies share similar roots: Both were founded as grocery vendors in the San Francisco Bay Area, though GrubMarket eventually took a different approach to scaling as a wholesaler.
GrubMarket uses AI-powered technology to connect wholesalers with grocery suppliers. The company has been on an acquisition spree in the last year, buying up at least seven wholesale produce providers from California to Texas to North Carolina and even into South Africa.
It has also beefed up its tech, buying two software and AI-powered supply chain companies in the last three months.
That growth has been fueled by investment capital, the latest being a $200 million Series E in November 2021 with a pre-cash valuation of $1.2 billion. At the time, founder and CEO Mike Xu said the company was aiming to go public in the “next 11 months or so,” but it remains private.
“The only success criterion of my entrepreneurial pursuit remains whether I am able to eventually scale GrubMarket to achieve $100 billion in annual revenues (ecommerce and software sales combined), offering both first-mile and last-mile digital solutions for the food supply chain industry in not only the U.S., but also across the globe,” Xu said in a statement.
The acquisition comes as online grocery delivery companies jockey for consumers and consolidation increases. Gopuff has also been focused on M&A as a way to secure its place in the delivery space. Its 2020 acquisition of BevMo led the digital grocery platform into another five acquisitions in 2021.
In November, Turkish delivery company Getir acquired FreshDirect from Ahold Delhaize. Getir has since abandoned its own U.S. delivery services, but FreshDirect remains active domestically.
More recently, many platforms have shown an appetite for partnerships with grocery chains to expand their respective offerings to consumers. Instacart has inked a deal with Uber Eats while Grubhub has signed deals with Albertsons, Amazon and independent grocery store ordering platform Mercato.
