Mom-and-Pops Even the Odds with Amazon

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You know the story: we stayed at home, we ordered online. Office supplies, electronics, groceries. Lots of groceries.

In the pandemic year, Amazon — with Whole Foods folded neatly into its portfolio — capitalized. Revenue up 20% to $386 billion. Profit up 84% 21.33 billion.

That made Jeff Bezos (even more) obscenely rich. But it left some mom-and-pop grocers — lacking the sophisticated tech of the retail giant — at a disadvantage. Mercato, a start-up that helps smaller grocers digitize, is trying to change that and it just got a $26 million war chest to do it.

Clean-up on aisle 26 (million)

The Series A funding round comes after an eye-popping 2020. Mercato’s merchant sales grew 1,300% last year thanks to a platform that, in a matter of minutes, digitizes and displays a store’s entire shelf stock in an easy-to-navigate online marketplace for pick-up and delivery orders.

It costs merchants $96 to $228 per year, way lower than other delivery companies charge, which has allowed it to rapidly scale.

  • The company serves over 1,000 merchants in 45 U.S. states, and is active in the Big Apple, the Windy City, the City of Angels, the City of Brotherly Love, Beantown, and whatever Sacramento’s nickname is.
  • With a run rate of $700 million, the company has overseen a billion dollars in sales since the start of the pandemic.

Expiration date?: Pre-pandemic, it’s estimated online grocery orders accounted for only 3.4% of total grocery sales in the U.S. That figure leapt to 10.2% in 2020. Whether these numbers hold in a post-vaccine world remains to be seen, but one study suggested it to go even further, with online orders accounting for 21.5% of total sales by 2025.

the takeaway

Jeff Bezos could sneeze and $26 million would fall out of his pockets, but it’s a start.