Shipt Grocery Delivery Startup Raises $20M

Grocery delivery startup Shipt raised $20.1 million in funding Wednesday to offer up competition to Instacart.

Greycroft Partners, Harbert Growth Partners and participated in the Series A round. The company has raised $25.3 million to date.

CEO Bill Smith founded the startup in 2014 and launched in Birmingham, Alabama. Now with offices in San Francisco, Shipt has grown to deliver groceries in 27 cities across 10 states with a community of more than 5,000 shoppers.

Shipt partners with leading grocery retailers and a community of shoppers to provide its members with fresh groceries. For $99 a year, the Shipt app allows members to select their preferred retailer, browse a full selection of grocery items and choose a one-hour delivery window. Shipt members receive unlimited grocery deliveries on all orders over $35 and Shipt shoppers are paid per-order and average about $17 per-shop, according to TechCrunch.

The company is moving into the market at a time when other grocery delivery services are struggling to remain profitable, according to Recode. Competitors include Amazon and Fresh Direct, which maintain refrigerated warehouses near cities as the source of their fresh groceries. Grocery delivery service Instacart increased its delivery fees to $5.99 in December, up from $3.99. The cost of Instacart’s annual subscription service for Instacart Express increased from $99 to $149. Google also entered into the sector in February, delivering fresh groceries via Google Express.

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