The Birmingham, Alabama-based online grocery delivery service – Shipt – has raised another $40 million in order to compete with other rival delivery services and become the dominant grocery delivery brand in the United States. Shipt is challenging companies like Amazon, Google and Instacart with its recent funding.
Investors doubling their investments on Shipt
The Alabama-based delivery service is challenging companies like Amazon and Google from its home southeast with a strategy that had ignored many of the largest coastal cities in the country, such as Los Angeles and New York, in favor of big cities in the Midwest and southeast, notes news site TechCrunch.
The delivery service is looking to aggressively expand beyond the20 million families and 47 metro areas that it currently serves to around 100 cities within the next year with the new $40 million in funding coming from the previous backers of the delivery company. The previous investors of the company are Harbert Venture Partners, Greycroft Partners and e.ventures. The main crew of investors is surprisingly doubling down their $20 million investment from a little less than the last year.
The Birmingham, Alabama-based online grocery delivery service uses an annual membership model instead of charging its customers per-delivery. The annual membership model of Shipt is like the one by Amazon, where the customers have to pay $99 per year. The delivery service does not focus on deliveries on demand; rather, the company gives customers multiple delivery windows from which to choose. The delivery service can manage logistics in a better way by setting up those windows for delivery and it can also improve the efficiency of its entire delivery system as well.
Shipt is amazing, here’s why
In a statement, Ian Sigalow, co-founder and partner at Greycroft, said “Shipt set out to transform the way people think about grocery shopping, and in the process they turned a service that was previously available to only a small subset of the population into an affordable luxury for millions of households.”
Already, according to the statement by the Alabama-based delivery service, the company has partnered with big grocery chains including Whole Foods, H-E-B, Costoc, Miejer and ABC Fine Wine and Spirits. The average basket size per-order of Shipt is $110 that is more than three times in comparison to the in-store average for purchases.
A spokesperson said that the delivery service is bigger than Google Express and is almost the same size as AmazonFresh (at the moment). Bill Smith, the CEO and founder of the company, said “Grocery shopping is one of those activities that everyone has to do, but often feels like a chore. Shipt’s goal is to give people back the hours they would normally spend at the grocery store so that they can focus on the things that matter most to them.” Member can shop for household goods, groceries and even alcohol sold by the retail partners of the company through the Shipt app. The company offers unlimited free deliveries and a membership fee for its service unlike other on-demand services.