VC Firms Deliver $48.5M to Food Site

Carrollton, Texas-based GroceryWorks closed its first round financing recently, netting $48.5 million from a syndicate of venture capitalists that was led by The Sprout Group.

Additional commitments came from Enterprise Capital Partners, J.P. Morgan Investment Bank, Blue Rock Capital Partners and private investors.

The company launched its home delivery service last November, and the capital infusion primarily will be used to accommodate increasing demand. GroceryWorks’ initial strategy is to provide users with access to higher quality products-specifically produce, meats and seafood-than are otherwise available.

Kathy LaPorte, a principal with Sprout Group, said that while the grocery delivery space is increasingly crowded, GroceryWorks’ model attracted interest.

“We felt that the combination of higher quality in an economic model that makes return sense was the main factor,” LaPorte said.

GroceryWorks also named Gary Fernandes chief executive officer. Formerly vice chairman of Electronic Data Systems Corp., Fernandes most recently worked with Convergent Partners, a technology-focused private equity firm (PEW April 5, 1999, p. 1).

Sprout closed two additional financings recently, leading a $25 million investment in, a New York-based online retailer of high-quality diamonds, fine jewelry and luxury gifts. Mondera closed its $13 million first round Sept. 9, in a deal that was led by @Ventures and included Global Investment Partners (PEW, Sept. 20, 1999, p. 3).

Sprout also participated in the latest financing of Perfecto Technologies, an e-business security software company based in Mountain View, Calif. The company’s other venture investors include Goldman, Sachs & Co., Intel Corp., Sequoia Capital and Walden Group.