ShopLink.com Fills Cart with $37.5M

In an online grocery marketplace that has so far been most notable for bouts of fundraising one-upmanship, ShopLink.com got into the act last week by completing a $37.5 million venture capital round. The transaction helps set the stage for a third ShopLink.com venture round that is currently being shopped to investors and is said to have a significantly higher price tag than $37.5 million.

The company’s initial funding garnered $12 million led by Soros Equity Partners LLC.

MF Private Capital led on the completed funding with BancBoston Ventures as the only other new institutional participant. Existing investors included Soros spin-off Quantum Industrial Partners, Asdale Ltd., and AC Ventures.

Proceeds from the financing will be used to help ShopLink.com achieve its expansion plan of 30 total facilities by 2003.

“We’re a suburban model,” said ShopLink.com chief executive and chairman John Icke, “so we’re really targeting families in which both parents work and benefit from the convenience of our ability to deliver without people having to be home.”

Indeed, ShopLink.com ranks first in a recent Gomez Advisors Internet Grocery Services Scorecard among so-called “selective shoppers,” and fourth overall.

“A selective shopper is somebody who is the most quality conscious, relatively affluent, very convenience-minded and doesn’t mind paying a little bit extra,” said Gomez’s Matt Stamski. “ShopLink fits in the market pretty well since about two-thirds of the people buying groceries online have an average household income of $80,000.”

Of course, ShopLink’s suburban focus could prove problematic if today’s bulls take a bearish turn. “While the Peapods and Webvans are trying to expand and communicate to the masses, ShopLink is going after a higher-end demographic that could be affected by an economic downturn due to its weekly subscription fee on all deliveries,” Stamski said.

Not to worry, though, said Icke who pointed out that hard economic times can necessitate longer work hours and the need for additional convenience. BancBoston Ventures’ principalWilliam Parent added, “We think that this is a very attractive model for a suburban consumer base. Having a monthly charge requires you to validate your value.”

In a related story, Gomez Advisors completed a $30 million venture funding deal last Tuesday led by BancBoston Ventures. Although it might look a bit suspicious that Gomez is accepting money from an investor who also owns part of a Gomez-analyzed company like ShopLink, company spokeswoman Jackie Price stated that the advisor service maintains solid firewalls between analysts, financial professionals and salespeople.

Additional investors in Gomez’s third round funding were Softbank, HarbourVest Partners, Dolphin Communications Partners, John Hancock Global Technology Fund, West End Venture Partners and a private investor group led by Boston financier Paul Palandjian. Proceeds will be used for increased staffing, technology development and a $10 million to $12 million advertising campaign set to hit in April.