US-based Food Rocket, a rapid grocery delivery startup, providing door-to-door delivery within 15 minutes, has picked up $25 million in Series A funding. The investment round was led by Alimentation Couche-Tard Inc. (ACT).
ACT’s equity investment in Food Rocket came through its Circle K Venture Fund, which was established to invest in companies developing transformative solutions that are shaping the future of convenience. It has over 14,000 Circle K and Couche-Tard locations in 26 countries and territories, including more than 7,000 in the US.
Food Rocket will use the investment to expand the service in Chicago and other cities throughout the US and reinforce its AI-enabled software and enhance the team.
“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,” noted Vitaly Alexandrov, CEO and founder of Food Rocket.
“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.”
Uses AI technologies
Founded by Jerrin James and Vitaly Alexandrov in 2021, Food Rocket AI-enabled technologies to manage warehouse stocks, forecast demand and optimise delivery time by predicting the closest store that offers the fastest delivery time and the lowest costs of putting together and delivering the order. It aims to shift the consumers’ buying habits from advance, bulk purchasing to daily shopping.
In its first market California, 60% of Food Rocket customers order a second time for a $30 average order value. Earlier this year, the startup entered Chicago’s rapid delivery market as well. It is in plans to create over 2,000 jobs in new areas.
Unlike many other rapid delivery services that use gig employees, this 15-minute delivery service offers full-time employment to all of its riders, thereby assuring them a guaranteed income as well as benefits.
Partnership with Circle K
Through the partnership, the delivery startup 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.
It expects to benefit from Circle K’s size and scale, consumer insights, marketing expertise, procurement network and supply chain efficiencies to expand its offerings into categories beyond grocery, improve its purchasing power, improve its purchasing power, reduce costs and grow profitability. The startup emphasises on proprietary software and launched a system that enables forecasting stock levels and employee workloads in its operations.