Last updated on June 13th, 2024
AI-powered personalized grocery service Hungryroot has raised $40 million in a Series C funding round. The financing is led by the Growth Fund of L Catterton, a global consumer-focused private equity firm.
Hungryroot will use the capital to increase the number of groceries and recipes it offers, grow its team, invest in automation technology, optimize its proprietary personalization algorithm and scaling marketing – all to help propel grocery shopping into the 21st century.
“Hungryroot is pioneering an entirely new way to grocery shop. We leverage proprietary technology to predict and deliver the groceries and recipes that best suit each individual customer’s needs and goals,” said Ben McKean, founder and CEO. “The result is a customer-first, curated experience that reduces the average time consumers spend grocery shopping from two to three hours a week, to just two to three minutes. The days of walking into a giant grocery store with an empty cart and browsing through tens of thousands of items will soon be a routine of the past. Hungryroot does the work for customers so they don’t have to.”
While grocery is the world’s largest retail category at a more than trillion-dollar market, it is one of the few industries that is still in the early stages of digital transformation. As more consumers move their grocery routine online, Hungryroot says its AI-enabled platform is paving the way for what grocery will become.
Hungryroot has reinvented the end-to-end grocery experience by leveraging predictive and automatic deliveries. The company uses machine learning and predictive modeling technologies to build customers’ carts for them with fresh groceries and simple recipes that best meet their needs and objectives. Hungryroot also supports customers with meal planning, nutritional support and at-home delivery, making the entire grocery experience more convenient, affordable and sustainable.
“No two deliveries are the same,” McKean said. “Every delivery is curated for that individual customer and their family. And while customers have the option to edit their order or change their preferences at any time, we’re finding that our predictive technology is so accurate, customers trust us to select the majority of their weekly groceries for them. The end result is that customers save time and headspace, and achieve their food goals, including losing weight, saving money or trying new foods.”
“For most people, grocery shopping is a time-consuming, tedious experience. Hungryroot has created a technology platform made for modern lifestyles that delivers a personalized, AI-powered consumer experience that traditional grocers simply cannot,” said Chris Roberts, a partner at L Catterton Growth Fund. “We believe Hungryroot is the first online grocer of its kind and have been impressed with its incredibly capital-efficient e-commerce model, which has already reached profitability. We’re thrilled to partner with and support Hungryroot as they continue to reinvent the grocery category and build upon the company’s strong momentum.”
New York-based Hungryroot has been profitable since the beginning of 2020 and is on track to achieve $175 million in revenue this year. The company is forecasting more than $300 million of revenue in 2022. Having only raised $35 million prior to this financing, Hungryroot is one of the most capital-efficient businesses in the grocery industry. This is driven by its best-in-class technology platform and industry-leading customer retention, with the average customer spending 64 percent more on Hungryroot in their first five months than the other leading grocery and food delivery services.
L Catterton has significant experience investing globally in fast growing, disruptive digital brands. Current and former investments include Better Mortgage, Vroom, Nutrafol, ClassPass, Function of Beauty, Savage X Fenty and Public Goods.
