Fabric and Green Rabbit, two companies designed to improve the efficiency and profitability of grocery delivery, announced significant investments this month.
Consumer interest in online grocery has continued to grow as heavyweights Walmart and Amazon battle for the future of grocery — with e-commerce serving as the front line. Walmart introduced in mid-September a subscription that allows shoppers unlimited grocery deliveries for $12.95 per month, and Amazon announced Oct. 29 that it will provide Amazon Prime members with free grocery delivery from Amazon Fresh and Whole Foods.
Because these major retailers and Kroger have been spending big to build out their e-commerce capabilities, other grocery retailers have felt the pressure to offer those services as well, and that is where companies like Fabric and Green Rabbit see lots of opportunity.
On Oct. 23, the company formerly known as CommonSense Robotics and founded in Tel Aviv, Israel, recently received $110 million in a Series B funding round led by Corner Ventures.
Fabric, which builds micro-fulfillment centers created to decrease the cost and complexity of grocery delivery, plans to use the money to accelerate its expansion in the U.S.
“The demand from the market for a location-first approach to automation is just staggering,” chief commercial officer Steve Hornyak said in a news release. “Now, with this latest round of funding, Fabric is poised to enter a new stage of hypergrowth. We currently have 14 sites under contract and are rapidly expanding our U.S. presence with plans to launch micro-fulfillment centers in several cities across the U.S. in 2020. The first site in the NYC area is already under construction and will be online in Q1 2020.
“Our flexible platform and deployment models empower businesses to get closer to their customers while maintaining profitability in whatever way works best for them,” Hornyak said.
Last year Fabric built the world’s smallest fulfillment center, which processes up to 600 orders per day out of 6,000 square feet. The center includes one-hour delivery capabilities, per the release.
“Fabric is the micro-fulfillment market leader with a production-proven platform that drives tremendous value for its retail partners and consumers alike,” John Cadeddu, managing partner at Corner Ventures, said in the release. “We are delighted to be partnering with the Fabric team in their incredible vision to reinvent how goods are fulfilled and delivered in this on-demand world, ultimately empowering retailers to provide faster deliveries at lower costs and at scale.”
On Oct. 29, logistics company Green Rabbit — originally founded as Candy.com — announced a $31 million minority investment from Guidepost Growth Equity.
“The company has since dramatically expanded its services and capabilities to ship millions of orders per year for more than 5,000 perishable items across 150 brands,” the company wrote in a news release. “By leveraging its own proprietary algorithms, Green Rabbit ensures that all orders are managed and packaged appropriately, resulting in 99.9% delivery success rate.”
Green Rabbit is currently delivering fresh produce as part of grocery orders, according to the company. It has fulfillment centers in Visalia, Calif., Indianapolis and Braintree, Mass., and already works with six of the 10 largest retailers in the U.S.
“As online grocery and perishable food sales represent one of the fastest-growing segments in e-commerce, major retailers and CPGs are looking to maximize their digital growth strategies,” Won Park, principal of Guidepost Growth Equity, said in the release. “We’re excited to partner with Green Rabbit to help them become the cold chain logistics standard that powers the future of digital food service initiatives.”