The epidemic increased the way groceries are purchased for people’s everyday needs. Online grocery sales in the US are expected to reach 21.5% of total grocery sales by 2025, after leaping from 3.4% pre-epidemic to 10.2% by 2020. One business riding this wave is Mercato, an online grocery platform that helps small grocers and specialty food stores go online quickly. After helping its merchant sales grow 1,300% in 2020, Mercato has now closed on $ 26 million in Series A funding, the company tells ClearTips.
Gol was led by Velvet Sea Ventures, with participation from Team Europe, co-founder of Lukasz Gadowski’s investment arm, Delivery Hero. Seed investors Grecroft and Loeb.Neck also returned for the new round of Godowski and Mike Lezarov of Velvet Sea Ventures has also joined Mercato’s board.
Mercato was founded in 2015 by Bobby Brannigan, who grew up in Brooklyn while helping out at his family’s grocery store. But instead of taking over the business, as his father expected, Branigan left for college and eventually went on to bootstrap Velor Books, a college textbook marketplace for $ 100 million, for sale. After selling the business, he turned his attention to the family store and found that everything was still going on in the same way as it had been decades earlier.
“They have a very basic website, no e-commerce, no social media and no point-of-sale system,” explains Branigan. “I said, ‘I need you. It was an opportunity for me to help my dad in the field that I knew about.
Brannigan recruited some engineers from his last company to help build software systems to modernize his Dad’s store, including Mercato co-founders Dave Bateman, Michael Mason and Matthew Alary. But the team soon realized that she could do more than help Brangan’s father – they could also help 40,000 independent grocery stores, such that he competes better with the world’s Amazon.
The result was Mercato, a platform-as-a-service that makes it easy for small grocers and specialty food shops to go online to offer their inventory for pickup or delivery, with grocery delivery services like Instacart, Amazon Fresh With or without a partner. To shift
The solution today includes an e-commerce website and data analytics platform that helps stores understand what their customers are looking for, where customers are located, how to price their products, and other information they need to Help the store run better. And Mercato is now working to add on a supply platform to help stores purchase inventory through its system, Brannigan’s Notes.
“Basically, its vision is to give them the technology, the systems and the platforms needed to succeed in this day and age,” Brannigan said.
He likes Mercato as a “shop for groceries”, as it stores its own page on Mercato where they can reach customers. When customers visit Mercato on the web or through its app, they can enter their zip code to see which local stores offer online shopping. Some stores simply redirect their existing website to their Mercato page, as they may continue to offer other basic information about their store, such as address, hours, and other details, on the Mercato provided site, while Mercato K1 Gaining access to more than a million subscribers.
However, merchants can also opt for a white-label solution, which they can plug into their website, which uses its own branding.
Stores can customize the experience they want to provide to customers in terms of pickup and delivery, and set deadlines for both what they want to do. If they want to ease into online grocery, for example, they can start with next day delivery services, then speed up to the same day when they are ready. Depending on staff level, they can also set limits on how many time slots are offered per hour.
Unlike Instacart and others that send shoppers to fill orders, Mercato allows merchants to maintain a customer relationship by handling orders themselves, which they can send via email, text, or even robo-phone calls. Can get through
“They are maintaining that relationship,” Branigan says. “Usually, it’s great if it’s someone from the shop [doing the shopping] Because they can get to know the customer; They know what kind of product they are looking for. And if they don’t have it, they know something else they can suggest – so they’re like a really efficient recommendation engine. “
“He said that the major difference between an Instacart shopkeeper and a store employee is that the employee at the store understands that someone is trying to put food on the table, and some things can be an important ingredient,” he Let’s note. “For shoppers on Instacart, it’s about a time clock: how quickly they can choose an order to make the most money.”
Once the order is ready, the company contracts with both national and regional couriers to handle the delivery portion.
When online grocery demand skyrocketed, Mercato’s system was put to the test during the epidemic.
This is where Mercato’s ability to fast-track merchants came in handy. The company says that it can pick up the online store in just 24 hours, as it has created a centralized product list of over one lakh items. It then connects to the store’s point of sale system, and uploads and matches the store’s products to its own database. This allows Mercato to map around 95% of the shop’s products in a matter of minutes, with the last bit added manually – which further helps to build Mercato’s inventory. Today, Mercury Grocery can integrate with almost all point-of-sale (POS) solutions in the marketplace across more than 30 different systems.
As a store of customers, Mercato’s system uses machine data to help determine if a product is likely to be in stock by examining movement data.
“One of the challenges of grocery is that most stores don’t really know how much of a product they have in stock,” Branigan explains. “So we start a store, we integrate with POS. And with POS we can see how fast a product is moving in-store and online. Depending on the movement, we can calculate What is in stock. “
This system, she says, is getting smarter over time as well.
“We’re definitely three to five years ahead, and we’re not going back,” COVID’s Branigan impresses on the online grocery business. “In terms of offering e-commerce, it is very plentiful in many places. And the nature of retail businesses is competitive. So if 1% of people are online, it cannot drive other people. If you have 15% of online stores, other stores will have to get online or they will not be able to compete.
Mercato revenues from its consumer-facing subscription program by $ 96 / year – $ 228 / year, depending on distance, and by a percentage lower than merchants themselves who pay single-digit percentage transaction fees on orders. Earns. What restaurant delivery companies charge.
The company now serves more than 1,000 merchants in 45 US states, including large cities such as New York, Chicago, LADC, Boston, Philadelphia, and others.
With additional funding, Mercato now aims to expand its remotely distributed team of 80 employees, as well as its data analytics platform, which will help merchants make better decisions that affect their businesses. It also plans to refresh consumer subscriptions to add more benefits and perks that make it more compelling.
Mercato refused to share its valuation or revenue, but as the epidemic began last year, the company said it was reaching a billion and $ 700 million run rate in sales.