Food Rocket, a San Francisco-based 15-minute grocery delivery service, announced a $25 million Series A investment that will be used to expand the service in Chicago and other cities throughout the U.S., as well as reinforce its AI-enabled software and enhance the team.
The lead investor in this round of funding is Alimentation Couche-Tard Inc. (“ACT), a global leader in convenience and mobility, with more than 14,000 Circle K and Couche-Tard locations in 26 countries and territories, including more than 7,000 in the U.S.
Through the partnership, Food Rocket is working with Circle K to explore ways in which the convenience store chain can extend its brand experience and offerings to customers beyond its physical stores through e-commerce and delivery. Meanwhile, Food Rocket expects to benefit from Circle K’s size and scale, marketing expertise, procurement network and supply chain efficiencies to expand its offerings into categories beyond grocery, improve its purchasing power, reduce costs and grow profitability.
The startup places a lot of emphasis on proprietary software and has already launched a system that enables forecasting stock levels and employee workloads in its operations.
“By bringing the retail expertise of our investors, we will be able to significantly improve the unit economics by reducing the purchase costs of goods and marketing costs. In the grocery delivery market, this is a unique opportunity to stand out from competitors. Moreover, our AI-based algorithms analyze the users’ purchases to increase the retention of each customer. We continue to build our team internationally by recruiting people from giant companies such as GoPuff and DoorDash,” said Food Rocket founder and CEO Vitaly Alexandrov.
In California, where Food Rocket launched in 2021, 60 percent of customers order a second time for a $30 average order value. Earlier this year, the startup launched delivery operations in Chicago. The team plans to create more than 2,000 jobs in new areas. Food Rocket continues to be one of the few startups offering full-time employment to all of its riders. This ensures workers a guaranteed income as well as benefits.
ACT’s equity investment in Food Rocket comes through its Circle K Venture Fund, which was established to invest in companies developing transformative solutions that are shaping the future of convenience.
“Food Rocket has an amazing, entrepreneurial team and technology with the potential to disrupt the delivery space,” said Kevin Lewis, chief marketing officer at ACT. “We are excited to partner with them as we continue to explore and pursue different and innovative new ways to serve our customers and make their lives a little easier every day.”
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