Extra consolidation is happening on the earth of on-line meals supply. TechCrunch has realized and confirmed that GrubMarket — the startup backed by Tiger World, amongst others, that has quietly constructed a B2B empire in produce and grocery logistics — has acquired Good Eggs, the once-feted recent meals supply startup that extra lately fell on exhausting instances.
The phrases of the deal aren’t being disclosed however we perceive from sources near the deal that it was a inventory transaction with a valuation marginally increased than Good Eggs’ final valuation, which was $22 million. Traders proactively approached GrubMarket on the lookout for an exit for Good Eggs.
We will additionally verify that Good Eggs will likely be run by a brand new chief beneath GrubMarket. Keith Brewer, who was the COO of GrubMarket-owned Daylight Meals, will head up Good Eggs. Whereas various Good Eggs’ workers are anticipated to return over to GrubMarket, it’s not but clear whether or not Rodrigo Arevalo, the Uber alum who’s at the moment listed as Good Eggs’ CEO, will likely be staying on as a part of that.
This can be a fairly main flip for Good Eggs, and yet one more sign of how buyers which have pumped a whole lot of tens of millions of {dollars} into perpetually loss-making startups at the moment are wanting to attract a line beneath these actions and transfer on.
Good Eggs, for context, valued as excessive as $365 million in November 2020 per PitchBook knowledge (a spherical it introduced in 2021), with a vaunted investor record that included Benchmark, Index, Sequoia and Thrive amongst many others. Submit COVID-19, nevertheless, it hit the rocks, and it was most lately marked down a whopping 94% final yr, touchdown it at that $22 million valuation.
GrubMarket, in the meantime, is now valued at round $3.5 billion and has raised over $560 million in funding. The corporate has lengthy has its eye on an IPO though with the general public markets nonetheless extraordinarily risky for tech shares, and the IPO window open only a crack. Mike Xu, GrubMarket’s founder and CEO, declined to touch upon that when interviewed for this story. (There’s a likelihood there might be extra financing getting introduced, too: GrubMarket’s $3.5 billion valuation was reported by CNBC earlier this yr; PitchBook’s final valuation of $2.2 billion dates from 2022.)
GrubMarket was initially a competitor, after which a provider to Good Eggs, and the altering nature of that relationship could effectively present a window into why some firms succeed within the grocery logistics and supply area, and a few don’t.
Each Good Eggs and GrubMarket launched, respectively in 2011 and 2014, with a give attention to B2C, particularly delivering bins of recent meals to shoppers and companies. However later, as Good Eggs stored its eyes on client, GrubMarket pivoted to concentrating on the B2B alternative, and it scaled quick working each with smaller grocers in addition to main ones.
Entire Meals is its greatest buyer, though it provides groceries and past to different majors like Walmart, in addition to different large names like Stanford College, and in the previous couple of years Good Eggs itself. With a reasonably relentless eye on margins, unit economics, KPIs, and lengthy relationships with suppliers — and I’d add a reasonably intense work ethic, judging by the shortage of sleeping hours of its founder — GrubMarket is worthwhile and has been for a while.
“Profitability is in our DNA,” Xu stated. “We all know the way to get issues worthwhile. It’s a scientific method.”
Xu added that the main focus nonetheless stays very a lot on B2B for his firm — it has made greater than 80 acquisitions, most of them to bolster that enterprise — though acquisitions like Good Eggs underscore the way it might use its economies of scale to revisit B2C once more. Nonetheless, Xu described the deal as “optimistic” fairly than opportunistic.
Grocery supply and meals startups general have confronted loads of ups and downs, with some classes hit particularly exhausting. Getir, a serious participant in “immediate” grocery supply that aggressively raised a whole lot of tens of millions of {dollars} (from among the similar backers as Good Eggs, because it occurs), earlier this yr lower its losses and retreated to its dwelling market of Turkey. Others are struggling to lift at sturdy valuations, whereas a number of like GrubMarket play the function of consolidator to enhance price construction. Publicly-traded Instacart is because of announce earnings at the moment, which might show a bellwether to how others will fare.