Mercato, Grocery Delivery Startup For “Indie” Retailers, Gets $4M

Xconomy San Diego — 

Delivery services such as Shipt and Instacart deliver groceries to customers’ doorsteps daily. Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) also offer the service, albeit only for their own stores.

Large-scale chain stores are the focus of most grocery delivery services.

Mercato, a San Diego startup that bills itself as the option for independent grocery stores and specialty foods retailers, announced this week that it had raised $4 million in venture capital investment to expand the network of stores from which it delivers.

Headed by CEO Bobby Brannigan, the company today offers online shopping and deliveries from more than 750 stores in 13 cities in five states and Washington, D.C. It’s headquartered in the Downtown Works coworking space.

Mercato’s software was designed specifically for independent grocery stores and specialty food retailers, which is part of what differentiates it from competitors, Brannigan says in a news release. Features that merchants can access including the ability to throttle orders, define delivery times, communicate directly with customers, and add items and change prices in real time, according to the company. It also gives retailers access to product and pricing analytics.

The company said that in addition to expanding its market base, the cash infusion will also be used to boost its sales and marketing, and to further develop analytics and services for the retailers who use the platform. Customers in San Diego can order from Windmill Farms and Venissimo Cheese; other areas, such as Boston, have a broader set of options, including the North End Fish Market and Salumeria Italiana.

Greycroft, a New York-based venture capital firm that invests primarily in internet and mobile startups, led Mercato’s new financing round. The firm manages more than $1 billion and has invested in about 200 companies, including investment app Acorns, scooter startup Bird, e-commerce retailer Thrive Market, and peer-to-peer payments platform Venmo. (Greycroft co-founder Ian Sigalow last year headlined the San Diego Venture Group’s annual Venture Outlook event.)

Previously Mercato raised $4.7 million from investors including Loeb Enterprises, which is headed by Priceline.com (NASDAQ: BKNG) co-founder Michael Loeb. Local serial entrepreneur Neil Senturia’s Blackbird Ventures was also an early backer.

Five members of the Mercato leadership team, including Brannigan, previously worked together at online textbook startup ValoreBooks. The company, which Brannigan also founded, was acquired by Boston’s SimpleTuition in 2012.