In a Series A fundraising, e-commerce platform Mercato announced today that it has raised $26 million to help keep up with continued growth and help small grocers compete online.
Mercato’s $26 million Series A financing was led by Kass and Michael Lazerow’s Velvet Sea Ventures based in Birmingham, Michigan with participation from Team Europe, and the investing arm of Lukasz Gadowski who co-founded Delivery Hero. Existing investors and partners Greycroft and Loeb.nyc also participated in the first fundraising round.
With the recent funds raised, Mercato will be able to expand the capabilities of the platform to extend beyond e-commerce, continuing to support merchants with business intelligence, marketing, and additional services.
Mercato is an online supermarket platform founded in 2015 by its current CEO Bobby Brannigan that helps smaller grocers and specialty food stores transition to selling goods online.
With its merchant sales up by 1,300% in 2020, the company has been successful in providing small grocers an opportunity to go online and offer their inventory for pickup or delivery, without having to partner with a grocery delivery service.
Mercato founder and CEO Brannigan said that while almost every industry was undergoing digital transformation, independent grocers were stuck in the past.
“While my family’s store had a modest website, there was no e-commerce functionality, no email marketing, and no true data tracking. Performance was healthy, with loyal customers from the neighborhood shopping in-store and calling in the occasional order, but we were at risk of missing out on sales to customers who were increasingly drawn to online ordering,” Brannigan said in a company blog.
For the company executive, 2020 was an unprecedented year for the industry, with online sales for grocery growing to 10% of all sales. This number is expected to grow to 22% within the next two years.
“Today, we help more than 1,000 grocers across 45 states compete in an always-on, instant gratification world where online ordering and two-hour delivery are not options but expectations. These are businesses that did not always have staff to manage online ordering, marketing, and data analytics before Mercato. Mercato also helps independents compete with Amazon, Instacart, and the large chains,” Brannigan added.