San Francisco online grocer and meal kit delivery company Good Eggs has some very good news: After downsizing and closing in several markets back in 2015, it’s now scored a new $50 million investment round led by prestigious venture capital firm Benchmark Capital, whose partner Bill Gurley will join the Good Eggs board of directors. In a volatile market for food and grocery delivery, Good Eggs’s CEO Bentley Hall says the new investment is proof that “we’re here to stay.”
With the funding, Good Eggs will enlarge its presence in the Bay Area, the company’s only market after it closed in LA, Brooklyn, and New Orleans in 2015 (and brought on Hall later that year). In six months to a year, it will re-launch in LA, and hopes to create 1,000 new jobs in LA and the Bay Area in the process.
Things have definitely changed in the last few years at Good Eggs. “We used to be this occasional specialty grocer,” says Hall. Now, with same day delivery options and a selection that includes not just fresh produce and meal kits but even beer, wine, and cocktail kits, average customers spend more than $100 per order, Hall says, typically making multiple orders per week.
Amazon’s entry into the online grocery market, with its acquisition of Whole Foods, has cast a serious shadow over the industry — Hall jokes that he’s “heard of Amazon” — but he and Good Eggs are taking a sanguine outlook with regard to the e-commerce giant’s presence in the market. Amazon, he reasons, are “a catalyst that shifts consumer behavior online,” and with more than 90 percent of shoppers buying their groceries in-store, there are enough potential online customer converts to go around. And in terms of quality, Hall says he’s got a competitive edge: “We’re always gonna have way better perishables” than Amazon will deliver through Whole Foods, he claims.
Beyond the monetary investment, Gurley’s presence on the Good Eggs board bodes well: ”Bill is a legend for a reason,” says Hall. “I don’t know of a human on the planet who knows e-commerce better than him.”
For his part, Gurley also takes a rosy outlook with regard to the uncertain online food delivery market. “We’re always looking for opportunities where it may not be obvious,” the investor told Recode. “You make money with contrarian, non-consensus” investments.