Couche-Tard Invests in Food Rocket Rapid Delivery Service
LAVAL, Quebec — Alimentation Couche-Tard Inc. is the lead investor in the latest funding round for Food Rocket, a delivery startup that provides fast grocery delivery and promises door-to-door delivery within 10 to 15 minutes of the order's placement. The $25 million series A investment round will be used to expand the service in Chicago and in other cities throughout the United States, as well as reinforce Food Rocket's AI-enabled software and enhance its team.
Through their partnership, Food Rocket and Couche-Tard's Circle K convenience store brand are working together to explore ways in which the retailer can extend its brand experience and offerings to customers beyond its physical stores through e-commerce and delivery, according to the startup.
At the same time, Food Rocket anticipates benefiting from Circle K's size and scale, consumer insights, marketing expertise, procurement network and supply chain efficiencies to expand its offerings into categories beyond grocery, improve its purchasing power, reduce costs and grow profitability.
Food Rocket places significant emphasis on proprietary software and has already launched a system that enables forecasting stock levels and employee workloads in its operations, the company said.
"By bringing the retail expertise of our investors, we will be able to significantly improve the unit economics by reducing the purchase costs of goods and marketing costs. In the grocery delivery market, this is a unique opportunity to stand out from competitors," said Vitaly Alexandrov, founder and CEO of Food Rocket. "Moreover, our AI-based algorithms analyze the users' purchases to increase the retention of each customer. We continue to build our team internationally by recruiting people from giant companies such as Gopuff and DoorDash."
Food Rocket launched in 2021 in California, where 60 percent of customers order a second time for a $30 average order value, the company reported. Earlier in 2022, it launched delivery operations in Chicago, where it plans to establish its headquarters and create more than 2,000 jobs in new areas.
As one of the few startups to offer full-time employment to all of its riders, Food Rocket ensures workers a guaranteed income as well as benefits, the company noted.
Couche-Tard's equity investment in Food Rocket comes through its Circle K Venture Fund, which it established to invest in companies developing transformative solutions that are shaping the future of convenience. In March, Couche-Tard reported that it had already invested nearly $55 million of the fund's initial $100 million in companies such as Food Rocket, as Convenience Store News reported. The company did not disclose its specific contribution to Food Rocket's latest funding round.
"Food Rocket has an amazing, entrepreneurial team and technology with the potential to disrupt the delivery space," said Kevin Lewis, chief marketing officer at Couche-tard. "We are excited to partner with them as we continue to explore and pursue different and innovative new ways to serve our customers and make their lives a little easier every day."
Laval, Quebec-based Couche-Tard operates in 26 countries and territories, with close to 14,200 stores. Its banners include Couche-Tard and Circle K.