It is not often that a company waits ten years to take its first venture capital. MyWebGrocer, which was founded in 1999, raised $13 million today in a series A investment from the Stripes Group, a private equity firm in New York City. This is definitely a late-stage growth round. The company is already profitable. Stripes is a private equity firm that likes to invest later-stage growth companies, and there was even an investment bank involved (Montgomery & Co.) as an adviser to MyWebGrocer. Guess who wants to lead any eventual IPO?
MyWebGrocer, which is based in Vermont, was initially funded by its founder Rich Tarrant and then from operations as it grew to power the websites of 5,000 grocery stores across the country. Now it is looking to expand more aggressively, which is why it raised the series A.
MyWebGrocer runs websites on behalf of grocery chains and sells advertising to consumer packaged goods companies across all the sites, which collectively have a reach of 4 million shoppers. MyWebGrocer makes money both from fees paid by the grocery chains and a rev-share on the online ads. The Website scan be configured to simply show the week’s specials or include full online shopping modules, with the grocery store itself handling the delivery. In that sense it is a white-label version of Peapod, but with a highly-targeted ad network attached.
The grocery industry might be a niche, but it is a very large one. And its is an industry that is seemingly willing to outsource its Website operations to companies like MyWebGrocer.