Charlottesville-based RelayFoods.com, an Internet-based grocery delivery service, has received an infusion of $3.1 million from a global venture firm and other investors, company officials say.
A privately held company, RelayFoods.com began selling groceries specialty foods, and local farm products online in Charlottesville in 2009 and then expanded into Richmond.
Battery Ventures, a Massachusetts-based investment group with an estimated $4 billion in assets, made the investment. Battery focuses on investing in technology-based companies and counts investments Groupon and Angie’s List, among others, according to the firm’s website.
The capital investment will provide the company with money to expand the company’s operations base and customer services, officials said.
“We’re trying to change the way people shop for their groceries and our hope has been to be a regional and national player in online grocery shopping,” said Arnie Katz, president and chief operating officer of RelayFoods.com. “Brian O’Malley, from Battery Ventures, was looking for investment opportunities and investigated online retailers and we sort of found each other.”
“This is our largest venture capital funding investment to date, and it demonstrates the confidence investors have in our model and transforming the way people buy groceries,” said Zach Buckner, founder and chief executive officer of RelayFoods.com.
Formed in 2007, the company two years later began delivering groceries from vegetables to meat and cheese from local farmers. The grocery orders are taken to distribution sites where customers pick up the food. The company has since added, for a fee, doorstep delivery, bringing groceries directly to customers.
“Customers say they save money, time and gas,” said Buckner. “We’re continuing to grow in Richmond and Charlottesville and I think investors recognized that our rate of growth means our model is working.”
RelayFoods.com has 25 pickup locations in Charlottesville and 35 in Richmond area and 41 employees. It has a dozen trucks and more than 100 local merchants and stores offering more than 20,000 products, officials said.
Customers order from a variety of artisan farms and merchants as well as grocers such as Whole Foods Market and Rebecca’s Natural Food.
“When they approached Wolf Creek Farm in 2007, I thought it was a great idea,” said John Whiteside, of the Madison County cattle farm that raises and processes its own antibiotic-free, grass-fed cattle. “We thought it would increase demand for our products and provide another method of getting our products to our customers. It turned out to be what we expected, opening up our products to more consumers who might not see us at the farmer’s market or come out the farm to buy.”
“Relay is helping to fuel many entrepreneurial food ventures in Virginia,” said Buckner. “We offer small business owners with a passion for healthy and great tasting food a low-risk way to attract new customers and grow their sales.”
Whiteside said working with RelayFoods.com allows staff to focus on the farm rather than marketing and retail.
“Our major focus is on the farming and we don’t have a huge staff to handle retail operations,” Whiteside said. “This allows us to reach new customers and gives existing customers another way to find us and make purchases. It’s worked out well for us.”
Bryan McKenzie is a reporter for The (Charlottesville) Daily Progress.