Mercato Raises $26M To Empower Independent and Specialty Grocers

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By: Bobby Brannigan, CEO and Co-Founder of Mercato

I grew up sweeping the floors and stocking shelves in B&A Pork Store, an Italian grocer and butcher my father runs in Dyker Heights, Brooklyn. The fresh mozzarella, bread, sausage and, of course, eggplant parmigiana made in the store since 1976 are among the finest Italian specialities found outside of Italy.

After selling my internet company in 2015, I found myself back in the store helping my father, sweeping floors and working behind the register. It was nostalgic and incredibly refreshing to watch my father do the job he loves, sourcing high quality foods for our neighborhood. Nonetheless, I was struck by the fact that the store was operating the same way it had for decades.  

While almost every industry was undergoing digital transformation, independent grocers were stuck in the past. While my family’s store had a modest website, there was no e-commerce functionality, no email marketing, and no true data tracking. Performance was healthy, with loyal customers from the neighborhood shopping in-store and calling in the occasional order, but we were at risk of missing out on sales to customers who were increasingly drawn to online ordering.

I started Mercato to help my family business. Today, we help more than 1,000 grocers across 45 states compete in an always-on, instant gratification world where online ordering and two-hour delivery are not options but expectations. These are businesses that did not always have staff to manage online ordering, marketing and data analytics before Mercato.  Mercato helps independents compete with Amazon, Instacart, and the large chains.

Our mission is simple: we support vibrant and healthy communities through food.  We do this by providing insights, personal support, marketplace access, and giving back. What started as a simple mission of helping my dad is now a movement that is accelerating fast.

2020 was an unprecedented year for our industry, with online sales for grocery growing to 10% of all sales. This number is expected to grow to 22% within the next two years. Mercato’s momentum is even greater. We helped grow our merchant sales by 1,300% in 2020, and we expect them to more than double that this year as new shopping habits that developed during the pandemic stick.

In order to keep up with this tremendous growth, we need not only resources but additional partners around the table to help advise us.  Mercato’s $26 million Series A financing was led by Kass and Michael Lazerow’s Velvet Sea Ventures with participation from Team Europe, the investing arm of Lukasz Gadowski who co-founded Delivery Hero.  Existing investors and partners Greycroft and Loeb.nyc participated.  

Michael Lazerow will be joining our board of directors, and Kass Lazerow will be instrumental in advising us as we grow our business.  Throughout their careers, Mike and Kass have created and been part of iconic companies, including Buddy Media and Salesforce.  As investors, they  have aided and advised the development of companies like Mercato. They also share our deeply held belief that small business is a critical piece of America, and there is no better place to start than family businesses. Independent grocers play an outsized role here with more than 40,000 small grocers operating across America today. 

With these funds, Mercato will expand the capabilities of our platform to extend beyond e-commerce, continuing to support merchants with business intelligence, marketing, and additional services. I know we can build an important business by helping independent grocers successfully cross the digital transformation divide to supercharge their growth.

5 years after sweeping those floors at the B&A Pork Store in Dyker Heights, I can proudly say that the future is bright for every specialty store exceeding the evolving expectations of the modern, digital customer.

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