A lot of grocery delivery startup start small in one city and build up locations to cater to a certain neighborhood. Food Rocket has struck a funding deal with Alimentation Couche-Tard, which will put its 15-minute grocery delivery service in more than 14,000 Circle K convenience stores.
We first met the company and its founder and CEO in the Bay Area last year, when we reported that Food Rocket was going up against the likes of Amazon Fresh, DoorDash, and Instacart, which is no easy feat given each of the company.
The company raised $2 million at the time, and Alexandrov said that the level of competition in the U.S. is manageable. We want to replace brick-and-mortar supermarkets and change the way consumers shop for groceries.
Food Rocket uses artificial intelligence to manage warehouse stocks, forecast demand, and predict delivery time by predicting the closest store that offers the fastest delivery time and the lowest costs of putting together and delivering the order.
On-demand grocery startup Food Rocket launches in the Bay Area, goes up against delivery giants
The business model is not just about delivering groceries. We had the idea of converting all of our dark stores to micro fulfillment centers that would have local marketplaces to deliver items.
Food Rocket will be able to deliver in 26 countries and territories, including more than 7,000 U.S. locations, thanks to a new $25 million Series A investment from Alimentation Couche-Tard. The company has raised $30 million.
The plan for Circle K was a partnership that allowed the company to grow faster and be more efficient than others. Circle K's size and scale, consumer insights, marketing expertise, procurement network and supply chain, as well as Food Rocket's proprietary software for forecasting stock levels and employee workload, will be able to be used by Circle K.
The funding will be used to open around 15 stores in Chicago and San Francisco, as well as in other cities, including Boston, Philadelphia and Los Angeles. Food Rocket will create over 2,000 jobs in new areas and is one of the few startups that offers full-time employment to all of its riders.
In addition, he plans to launch a dark kitchen aspect of the business that will deliver foods that can be prepared in minutes, like coffee, bagels and pizza, that could still be delivered within 15 minutes. He wants to take a step further and deliver phones.
The company typically carries around 3,500 products, and since launching in California in 2021, it sees 60% of customers order a second time after their first purchase, and the cart size averages $30 per order. Food Rocket's revenue has grown 40% in the last month.
We aim to provide grocery delivery in a different way.
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