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Relay Foods sows $8.25M to bring local groceries to your door

John Whiteside of Wolf Creek Farm sells his grass-fed, natural beef on Relay Foods.

In today’s busy world, people don’t always have time for grocery shopping. Relay Foods has raised $8.25 million to do it for you.

Relay Foods is an online grocery service that currently operates in the Mid-Atlantic region. People shop online through a selection of inventory from local farms, artisan producers, and grocery stores. Relay Food gathers the order and delivers it to a pick-up spot or right to your door.

“Relay’s role in the grocery sector is one of host,” said cofounder and president Arnie Katz in an email. “We connect growers and busy families, butchers and working moms, bakers and hardworking professionals. We add value to their relationships by increasing the transparency in the transaction. We want the farmers to be the celebrities promoting their foods, as it should be. Relay Foods is content simply to be the host that brings these two groups of people together under one roof.”

Relay’s has partnered with hundreds of merchants and the inventory is wide — be it baby food or chia seed power snacks. Shoppers can search for specific items, peruse all the offerings from a particular vendor, or look within tags like “antibiotic free” or “expectant mothers.” Clicking on a specific vendor yields their backstory. For example, if you want to buy blueberries from Agriberry Farm, you can learn that farmer Anne Geyer is committed to eco-friendly farming practices and is a lifelong berry-grower.

Quite the number of food delivery startups have cropped up over the past few years, using the Internet to connect food growers and makers with consumers in a more streamlined, far-reaching way. Larger retailers like Safeway, Amazon, Fresh Direct, and Peapod offer home delivery, while startups such as Mile High Organics, Good Eggs, and Farmigo deliver local, sustainable food to consumers in regional markets.

Relay Foods will use this financing to expand its service in the Washington, D.C. and Baltimore metro areas as well as drive expansion into Williamsburg, Virginia. The money will also accelerate development of a dedicated mobile platform, web redesign, and recruiting. Additionally, Relay will use the investment to add vehicles to its fleet and expand its food storage capacities as well as launch a commercial kitchen.

“Many people consider groceries to be the Bermuda Triangle of e-commerce — a place where investment dollars go but never return,” said CEO Zach Buckner. “Relay has some fairly compelling evidence to the contrary, however. Our key metrics are currently right-side-up, so we’re cranking up our bet, big time. We aren’t out of the woods yet, but I think we’re poised to do to traditional groceries what Netflix did to video rental stores.”

Grocery is a challenging sector because it is difficult to expand. Entering a new market is like starting fresh each time, because it requires establishing a whole new set of relationships with regional food producers. Furthermore, it can require operating separate vehicle fleets, warehouses, and refrigeration facilities in each area. As a result, investors are often wary of putting their money into this space.

Relay, however, does not currently have this problem. This $8.25 million brings Relay’s total capital raised to $14.25 million. Participating investors include Battery Venutres and TomorrowVentures. Relay Foods is based in Charlottesville, Virginia.

Photo credit: Relay Foods