Instant Food Deliverer Fridge No More Bags $15.4M Series A To Change Grocery Habits
Sometimes in#nbsp;the middle of#nbsp;making dinner, you realize you don’t have that one vital ingredient. Rather than race to#nbsp;the grocery store, Fridge No#nbsp;More will do#nbsp;it#nbsp;for you.
However, the New York-based 15-minute grocery delivery service aims to#nbsp;be#nbsp;much more for its customers#nbsp;— a#nbsp;go-to replacement for your grocery store.
"We believe this space is#nbsp;important and will change the way people buy their groceries," company co-founder Anton Gladkoborodov told Crunchbase News. "The idea is#nbsp;pretty crazy for markets, and some people don’t think they need something like this, but we#nbsp;think people will shift from ordering once a#nbsp;week to#nbsp;more."
Fridge No#nbsp;More, which is#nbsp;available via your phone, received $#nbsp;15.4 million in#nbsp;funding to#nbsp;bring on#nbsp;additional staff and expand across New York City and the East Coast.
Insight Partners led the round, which also included existing investor Altair Capital. In#nbsp;addition to#nbsp;the new capital, the company previously raised $#nbsp;1.5 million nearly a#nbsp;year ago to#nbsp;build its first locations in#nbsp;Brooklyn, Fridge No#nbsp;More co-founder Pavel Danilov said in#nbsp;an#nbsp;interview.
The company’s concept was initiated a#nbsp;few years ago and formalized in#nbsp;March 2020. Then in#nbsp;October, Fridge No#nbsp;More made its first delivery.
Fridge No#nbsp;More has warehouse space with more than 2,000 SKUs and offers free instant delivery, no#nbsp;minimum order and prices that rival the supermarket, Danilov said. It#nbsp;also created a#nbsp;proprietary, data platform for inventory and order management that is#nbsp;optimized based on#nbsp;store-specific customer demand.
The new funding will be#nbsp;used to#nbsp;grow the engineering and operations team, as#nbsp;well as#nbsp;into marketing and expanding its locations. Fridge No#nbsp;More is#nbsp;in#nbsp;four locations and is#nbsp;targeting 40 more across Brooklyn, Manhattan and Queens.
Since delivering its first order last October, the company now has more than 2,000 customers and is#nbsp;averaging 200 orders per day at#nbsp;an#nbsp;average cart size of $#nbsp;40.
"Customers who make their first purchase become regular customers and are ordering weekly or#nbsp;a#nbsp;few times per week," Danilov said.
Market growth
E-grocery sales are expected to#nbsp;jump from nearly $#nbsp;35 billion to#nbsp;more than $#nbsp;250 billion, according to#nbsp;a#nbsp;study by#nbsp;grocery e-commerce specialist Mercatus and research firm Incisiv. Their study forecasts that online grocery sales are poised to#nbsp;reach 21.5 percent of#nbsp;total U.S. grocery sales by#nbsp;2025.
At#nbsp;the same time, 125 U.S. e-grocery companies have raised approximately $#nbsp;6.3 billion since 2017, according to#nbsp;Crunchbase data. Leading this group is#nbsp;Philadelphia-based goPuff, which delivers everyday essentials, including food and drinks, in#nbsp;minutes, raising $#nbsp;750 million in#nbsp;a#nbsp;2019 venture round.
What investors have to#nbsp;say
Meanwhile, Rebecca Liu-Doyle, principal at#nbsp;Insight Partners, said in#nbsp;an#nbsp;interview that the firm was monitoring the e-grocery market for a#nbsp;while. Fridge No#nbsp;More was creating a#nbsp;new category within the space, and when customers try it#nbsp;out, keep using it, she said.
"We are tracking a#nbsp;lot of#nbsp;new entrants, and this space will get competitive over the next six to#nbsp;18 months," Liu-Doyle said. "It is#nbsp;a#nbsp;really complicated business to#nbsp;run. To#nbsp;Pavel and Anton’s point, they are dealing with warehouses, perishable inventory and trying to#nbsp;deliver on#nbsp;high consumer expectations. The consumer is#nbsp;unforgiving, you have to#nbsp;make count. We’ve looked at#nbsp;several of#nbsp;these, and what impressed us#nbsp;was Pavel and Anton’s real product intuition, and how maniacally focused they are."
Published by Crunchbase#nbsp;— on#nbsp;March 16, 2021