Summary:
GrubMarket, a B2B grocery logistics giant valued at $3.5 billion, acquires Good Eggs, a struggling B2C fresh food delivery startup.
The acquisition signals a shift in investor sentiment away from loss-making startups.
GrubMarket's success is based on its focus on profitability and long-term relationships with suppliers.
The acquisition of Good Eggs could mark a return to the B2C market for GrubMarket.
The grocery delivery space is undergoing consolidation as companies struggle to compete and raise funding.
GrubMarket Acquires Good Eggs: A B2B Giant's Move Into B2C?
The online food and grocery delivery space is seeing more consolidation. GrubMarket, the startup that has quietly built a B2B empire in produce and grocery logistics and is now valued at $3.5 billion, has acquired Good Eggs, a once-feted fresh food delivery startup that has fallen on hard times recently.
The acquisition comes as a major turn for Good Eggs, which was once valued at $365 million but has been marked down significantly in recent years. This deal serves as another sign that investors are looking to draw a line under perpetually loss-making startups.
GrubMarket's B2B Dominance
GrubMarket's success is built on its focus on B2B. The company supplies groceries and other items to major department stores like Walmart, as well as to other big names like Stanford University. With a relentless eye on margins, unit economics, KPIs, and long relationships with suppliers, GrubMarket has been profitable for some time.
A Move Back to B2C?
While GrubMarket's focus remains on B2B, the acquisition of Good Eggs underscores how it could use its economies of scale to revisit the B2C market. The company's CEO, Mike Xu, describes the deal as "optimistic" rather than opportunistic.
Challenges in the Grocery Delivery Space
Grocery and food delivery startups have faced a lot of ups and downs. Major players like Getir have cut losses and retreated from their aggressive expansion plans. Others are struggling to raise funding at strong valuations. This consolidation is a sign of the evolving landscape of the grocery delivery space.
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