GrubMarket raises $50M at $3.5B+ valuation to build AI for the $1 trillion food distribution industry | TechCrunch

U.S. President Donald Trump’s wide-ranging tariff hikes are already resulting in growth forecasts being cut amid an uncertain public mood — all of which will inevitably impact the technology sector, too. On Tuesday, however, one food e-commerce startup, GrubMarket, seemed impervious to these macroeconomic concerns: it announced a new equity round of $50 million on a raised valuation of over $3.5 billion — underscoring how some tech businesses are not slowing down their expansion plans despite the high level noise.

The funding round — a Series G — includes participation from 3Spoke Capital, Joseph Stone Capital, Liberty Street Funds, Pegasus Tech Ventures, Pinegrove Capital Partners, Portfolia, and ROC Venture Group, along with additional unnamed backers. 

In a food distribution market estimated to be worth some $1 trillion annually, GrubMarket’s valuation has been on a swift upswing on the back of a growing balance sheet. The U.S. business pitches itself as an online farmers market, connecting consumers in North America with suppliers of local fresh produce, with the headline ambition of digitally transforming the American food supply chain industry.

The last GrubMarket round we covered was a Series E, back in 2021, when the company raised $120 million at a $1.2 billion valuation. A year later, per PitchBook, it raised a Series F — pulling in $120 million at a $2 billion valuation. (Note: the Series G detailed in PitchBook from last year is incorrect.)

Other investors in the company have included Battery Ventures, Tiger Global, Y Combinator, and many more (it has a cap table with more than 100 names on PitchBook.)

GrubMarket itself is a huge food distribution business, via its farm-to-fork proposition, but in the case of this latest equity fund raise, it says the money will go towards building more technology to improve how its customers can manage their businesses, with — you guessed it — a particular emphasis on AI. GrubMarket wants to use AI to help customers that have a lot of data to process, much of it through a mix of offline formats including voice mails and post-it notes. 

Eyeing bigger acquisitions

We understand that GrubMarket is on track right now to make $2.4 billion in revenues this year (they were at $2 billion in 2024). CEO and founder Mike Xu said in an interview that it is profitable on an Ebitda basis.

With the food e-commerce world consolidating, he also said GrubMarket will be using some of its cash on hand to make more acquisitions, both of startups and more legacy businesses. “As GrubMarket grows bigger, we have a chance to deal with bigger acquisitions,” he told us. “The industry always has had all sizes of wholesales and distributors and they need an exit when the owners get older or they want to embrace new technology and they make changes as a result.”

Food is of course a basic necessity, but in rich nations like the United States, it’s also a pastime and major fixation — thanks to the massive boost of commercialization through channels like social media and TV. 

Companies that can square that demand with supply and strong unit economics can make a killing. 

GrubMarket made its name originally as a healthy food procurement and distribution startup, taking a tech-first approach to work with disparate groups of farmers and other producers to get their goods to buyers, which were mostly small retailers and a few giants like Whole Foods. 

Over time, it beefed up its food distribution business further — seeing a bump in trade especially during the peak of the COVID-19 years — which led to its revenues and valuation climbing higher and higher. More recently, it has started to scoop up a variety of other sometimes-struggling food distribution startups (like Good Eggs) to build its profile in delivering direct to consumers. 

(Note, its cost cutting and consolidation seems to work: Good Eggs was at the end of its runway with all options exhausted when GrubMarket bought it; today, it is profitable, Xu told TechCrunch.)

Now with some 12,000 employees, GrubMarket is also spreading its wings by taking its technology and business model to more countries. In addition to being active across all of the U.S., it has a presence in Argentina, Canada, Chile, Colombia, Egypt, India, Mexico, South Africa, and Spain, and it plans to go further. It says its procurement and distribution network covers some 70 countries in all. 

Staying focused

For now at least, Xu is pretty sanguine, or else holding comment, on Trump’s tariffs and how they may impact his business — not to mention what the fallout could be on the wider global network for food distribution. (There are clear implications, at least, in the form of higher prices, possible supplier collapses, and a drop in demand.)

But as Xu said little has, so far, gone into effect that directly impacts logistics and tariffs on the produce and other food that GrubMarket trades in, it’s business as usual for the company for now.

In the meantime, he is focusing on AI and other technologies, which he believes will be a cornerstone of any version of his industry — big or small, flush or struggling — in the 21st century.

In the last year, he said that GrubMarket released “really comprehensive” enterprise AI software for the food supply chain industry. This includes components that provide business intelligence, an AI analyst to help customers plan and manage their cash flow, and a third AI that’s essentially an ordering assistant. 

The latter really taps into how the food supply industry sits across different modalities. Producers, wholesalers, and other distributors and logistics companies sit on a tremendous amount of data, but a large part of it is still coming through unstructured and very offline modes, like voice mail messages, scraps of paper, and text messages across many platforms.

The AI assistant’s aim is to ingest whatever is coming in and get it into a common format to be used throughout the rest of the system. Xu said that a number of the components have patents or filed applications, underscoring the seriousness of the endeavor in the business. 

Xu would not be drawn on what GrubMarket’s next steps might be, and whether they could include a public listing. The market these days seems, in any case, to be open to just as many scaled-up startups staying private and easing into quasi-private-equity arrangements, or buying back their shares, as it is to seeing them list in IPOs.

“GrubMarket has rapidly grown into a major food technology company by leveraging best-in-class AI-powered software solutions and strong operational discipline,” said Kevin Moss, president of The Private Shares Fund and MD of Liberty Street Advisors, in a statement. “The company’s growth and scale are supported by established business fundamentals and a commitment to sustainability, benefiting farmers in California and across the U.S.

“Through persistent innovation in AI enterprise solutions, vertical SaaS operational software, and its eCommerce platform and ecosystem, GrubMarket has become a pioneer in transforming the trillion-dollar American food supply chain industry.”