December 10, 2021

Grocery Supply Chain Disrupter Pod Foods Announces $13 Million in New Funding

Pod Foods, reinventing the grocery supply chain with the first full-service wholesale B2B marketplace with built-in logistics, has raised a total of $13 million in funding, including the closing of a $10 million Series A led by Industrious Ventures with participation from Microsoft’s venture fund M12, Moment Ventures and others.

The pandemic, as well as the rise of DTC (direct to consumer) 10-15 minute grocery and convenience delivery services, have created a stronger need for brands and retailers to connect as consumers demand faster access to a wider variety of products and retailers shift towards continuous optimization and faster category resets. Pod Foods streamlines the procurement process for retailers while enabling data-driven discovery for the emerging brands that consumers want. Current investors from the Company’s seed round, which previously saw the company raise $3 million, include Moment Ventures and M12.

“As consumers increasingly drive demand, the retail landscape is changing. The old way for retailers and brands to connect no longer works,” said Christian Gammill, partner at Industrious Ventures. “Pod Foods is the first to provide the logistics infrastructure needed to completely overhaul the grocery supply chain for the better, creating a true end-to-end system that enables both retailers and brands to thrive.”

Pod Foods helps retailers with brand procurement, solving the problem of fragmentation for the segment of high-growth brands that cannot afford the challenges and expenses of incumbent wholesalers. At the same time, Pod Foods gives emerging brands a transparent and easy-to-use platform to quickly reach relevant retailers across the country, providing access to the infrastructure needed to scale affordably and eliminating hundreds of thousands of dollars in hidden fees, chargebacks and other trade deductions. The unique marketplace connects the two sides with a streamlined UI, handling everything from orders down to fully-consolidated logistics that get the products from warehouse to shelf.

“Before we created Pod Foods, we ran a cookie company that grew a huge fan base, and we experienced first-hand how damaged the supply chain was on both the retailer and brand side when trying to enter retail. Traditional distributors are incentivized, by nature of their business model, to focus on the highest-volume, established brands. They squeeze out the emerging, high-growth brands driving industry growth. This leads to a gap in supply at the retail level, as retailers struggle to discover and procure brands outside of established distribution networks,” said Larissa Russell, Co-founder and CEO of Pod Foods. “The problem has become even more pronounced with pandemic-related production shortages as well as new consumer expectations in retail. Retailers have to respond even faster to get relevant products to their customers. More continuous, data-driven category optimization will take the place of quarterly or bi-annual product reviews and resets.

Pod Foods is the only asset-lite digital B2B marketplace with full logistics built-in, offering a one-stop distribution service that allows retailers to discover, order and receive products in a consolidated fashion, onboarding new brands and getting them to the shelf in as little as 24 hours. The company leverages proprietary logistics optimization software and a network of warehousing and carrier providers to empower the marketplace. It services not only traditional retail formats with wholesale products but also high-growth, direct-to-consumer delivery services like Gopuff, which was recently valued at $15 billion.

“Pod Foods has excelled at supporting emerging brands on a national scale,” said Michael Berl, Head of Regional Partnerships at Gopuff. “As Gopuff continues to enhance the retail experience, flexibility, speed and efficiency are of the utmost value. Pod Foods has been an ideal partner with the ability to onboard products quickly and seamlessly, allowing us to continue to bring in the best assortment to our growing customer base.”

The company’s Series A will be used to expand the Pod Foods brand and retailer network, helping brands and retailers connect nationwide. Pod Foods will also be scaling their data team to facilitate better matching and liquidity, as well as to right-size inventory counts. The company recently hired Timothy Wee as CTO, who formerly led machine learning projects at Google, Amazon and Walmart Labs.

“Retailers reacted correctly to the pandemic and prioritized keeping products flowing in the midst of price hikes and shortages. However, we’re now seeing consumers shift spending habits back to locally sourced emerging products – and it is imperative for retailers to adapt quickly,” said Fiona Lee, Co-founder, of Pod Foods. “Since last year, we have more than doubled the number of brands on our platform. We’re seeing a 20 percent increase in repeat brand purchases today compared to pre-pandemic data. Our solution helps them understand what to buy because we’re seeing the trends ahead of anyone else. We match the most relevant brands to the right retailers and provide retailers with fast procurement of those items to help them keep shelves full, without the hassle of dealing directly with each brand. ”

Other funds in the round include Unshackled Ventures, Barrel Ventures, Relish Works, X Factor Ventures, XRC Labs, K2 Global, Graphene Ventures and others. To learn more about Pod Foods and how they’re impacting procurement and distribution for retailers and brands click here.

Subscribe to Grocery Insight