Online grocery retailer FreshDirect announced late last month that it has completed a $189 million investment led by J.P. Morgan Asset Management and its PEG Digital Growth Fund II.
“We are thrilled to partner with a group of world-class investors led by J.P. Morgan Asset Management at this pivotal time for FreshDirect. The funding will fuel expansion into new markets, increase capacity with new manufacturing and distribution facilities, and launch new businesses that meet today’s consumers’ needs as their preferences and buying habits evolve,” said Jason Ackerman, FreshDirect’s co-founder and CEO.
Also involved in the financing W Capital and other investors advised by J.P. Morgan Asset Management, including the AARP Innovation Fund.
In addition, the Long Island City, NY-based company announced that Larry Unrein, head of J.P. Morgan Asset Management’s Private Equity Group, and Ashmi Mehrotra, managing director, joined the company’s board of directors.
“As demand for fresh ingredients delivered to your door continues to rise, high quality food, produce and packaged goods providers are drawing significant attention from the investment community,” said Unrein. “FreshDirect is one of the first to connect its customers with farmers and artisans at the click of a button. The company is also expanding its reach through the new mobile, on-demand offering FoodKick. By meeting the demands of the modern shopper on these two fronts, FreshDirect remains a forward thinking leader in this growing market segment.”
FreshDirect, which claims it’s been profitable since 2010, now exceeds $600 million in annual revenue primarily through its market share dominance in New York City. The company also serves New Jersey and the Philadelphia area.
Earlier this year, FreshDirect expanded its portfolio with the launch of FoodKick, an on-demand, mobile-first delivery business that caters to the spontaneous needs of urban dwellers with a curated selection of localized food, alcohol and everyday essentials.
“Great fresh food has always been the core of our business,” said Ackerman, “FoodKick extends that passion to a growing consumer base, serving up exciting food solutions and tailored ideas every time a customer opens the app.”
After it launched FoodKick earlier this year to serve Brooklyn and Queens, plans are now under way to expand the service to Manhattan.