Online grocery delivery service FreshDirect has raised a chunky $189 million in a round led by J.P. Morgan Asset Management, with participation from W Capital and AARP Innovation Fund, among others.
Launched in 2002, FreshDirect delivers fresh food to homes and businesses across five states in the U.S. Northeast, including the New York and Philadelphia metropolitan areas. Up to this point, FreshDirect had raised around $90 million, so today’s news represents the company’s biggest funding round by some distance.
The latest cash injection will be used to “fuel expansion into new markets, increase capacity with new manufacturing and distribution facilities, and launch new businesses that meet today’s consumers’ needs,” said Jason Ackerman, FreshDirect’s cofounder and CEO, in a press release.
FreshDirect garners north of $600 million in annual revenues and claims to have been profitable since 2010. But its latest funding comes as the startup faces increasing competition in the digital realm, with Amazon pushing its AmazonFresh grocery delivery service into more markets and Instacart making inroads, too.
“As demand for fresh ingredients delivered to your door continues to rise, high quality food, produce, and packaged goods providers are drawing significant attention from the investment community,” said Larry Unrein, head of J.P. Morgan Asset Management’s Private Equity Group. “FreshDirect is one of the first to connect its customers with farmers and artisans at the click of a button. The company is also expanding its reach through the new mobile, on-demand offering FoodKick. By meeting the demands of the modern shopper on these two fronts, FreshDirect remains a forward-thinking leader in this growing market segment.”
As a result of this investment, Unrein will join FreshDirect’s board of directors, alongside managing director Ashmi Mehrotra.