U.S. president Donald Trump’s wide-ranging tariff hikes are already resulting in growth forecasts being cut amid an uncertain public mood — all of which will inevitably impact the technology sector. On Tuesday, however, food e-commerce startup GrubMarket seemed impervious to these macroeconomic concerns: it announced a new equity round of $50 million at a post-money valuation of over $3.5 billion. The move underscores how some tech businesses are not slowing down their expansion plans despite the noise.
The funding round — a Series G — includes participation from 3Spoke Capital, Joseph Stone Capital, Liberty Street Funds, Pegasus Tech Ventures, Pinegrove Capital Partners, Portfolia, and ROC Venture Group, along with additional unnamed backers.
In a food distribution market estimated to be worth some $1 trillion annually, GrubMarket’s valuation has been on a swift upswing on the back of a growing balance sheet. The U.S. business pitches itself as an online farmers market, connecting consumers in North America with suppliers of local fresh produce, with the broader ambition of digitally transforming the American food supply chain industry.
The last GrubMarket round we covered was a Series E, back in 2021, when the company raised $120 million at a $1.2 billion valuation. A year later, per PitchBook, it raised a Series F — pulling in $120 million at a $2 billion valuation. (Note: the Series G detailed in PitchBook from last year is incorrect.)
Other investors in the company have included Battery Ventures, Tiger Global, Y Combinator, and more than 100 other names, per PitchBook.
GrubMarket is a huge food distribution business via its farm-to-fork proposition, but in the case of this latest equity fund raise, it says the money will go toward building more technology to improve how its customers can manage their businesses, with — you guessed it — a particular emphasis on AI. GrubMarket wants to use AI to help customers that have a lot of data to process, much of it through a mix of offline formats, including voicemails, and Post-it notes.
Eyeing bigger acquisitions
GrubMarket is on track right now to make $2.4 billion in revenue this year, up from $2 billion in 2024. CEO and founder Mike Xu said in an interview that it is profitable on an EBITDA basis.
With the food e-commerce world consolidating, he also said GrubMarket will be using some of its cash on hand to make more acquisitions, both of startups and more legacy businesses. “The industry always has had all sizes of wholesales and distributors,” he told us, “and they need an exit when the owners get older or they want to embrace new technology and they make changes as a result.”
Food is of course a basic necessity, but in rich nations like the United States, it’s also a pastime and major fixation thanks to the massive boost of commercialization through channels like social media and TV.
Companies that can square that demand with supply and strong unit economics can make a killing.
GrubMarket made its name originally as a healthy food procurement and distribution startup, taking a tech-first approach to work with disparate groups of farmers and other producers to get their goods to buyers, which were mostly small retailers along with a few giants like Whole Foods.
Over time, it beefed up its food distribution business further — seeing a bump in trade especially during the peak of the COVID-19 years — which led to its revenue and valuation climbing higher. More recently, it has started to scoop up a variety of other sometimes-struggling food distribution startups, including Good Eggs, to build its profile in delivering direct to consumers.
That cost cutting and consolidation seems to work: Good Eggs was at the end of its runway with all options exhausted when GrubMarket bought it; today, it is profitable, Xu told TechCrunch.
Now with some 12,000 employees, GrubMarket is also spreading its wings by taking its technology and business model to more countries. In addition to being active across all of the U.S., it has a presence in Argentina, Canada, Chile, Colombia, Egypt, India, Mexico, South Africa, and Spain, and it plans to expand further. It says its procurement and distribution network covers some 70 countries in all.
Staying focused
For now at least, Xu is pretty sanguine, or else reserving comment, on Trump’s tariffs and how they may impact his business — not to mention what the fallout could be on the wider global network for food distribution. (There are clear implications, at least, in the form of higher prices, possible supplier collapses, and a drop in demand.)
Xu said so far, little has directly impacted the logistics and tariffs on the produce and other food that GrubMarket trades in.
In the meantime, he is focusing on AI and other technologies, which he believes will be a cornerstone of any version of his industry in the 21st century.
In the last year, he said that GrubMarket released “really comprehensive” enterprise AI software for the food supply chain industry. This includes components that provide business intelligence, an AI analyst to help customers plan and manage their cash flow, and a third AI that’s essentially an ordering assistant.
The latter really taps into how the food supply industry sits across different modalities. Producers, wholesalers, and other distributors and logistics companies sit on a tremendous amount of data, but a large part of it is still coming through unstructured and very offline modes, like voicemail messages, scraps of paper, and text messages across many platforms.
The AI assistant’s aim is to ingest whatever is coming in and get it into a common format to be used throughout the rest of the system. Xu said that a number of the components have patents or filed applications, underscoring the seriousness of the endeavor in the business.
Xu would not share what GrubMarket’s next steps might be and whether they could include a public listing. The market these days seems to be open to just as many scaled-up startups staying private and easing into quasi-private-equity arrangements, or buying back their shares, as it is to seeing them list in IPOs.