Zero Grocery aims to eliminate unnecessary plastic from grocery delivery – TechCrunch

Startups

Zero Grocery is on a mission to deliver your groceries within two hours and in a way that won’t harm the planet.

The plastic-free grocery delivery, home delivery and personal care startup is one of the companies we brought up two years ago when we talked about venture capital investments in companies focused on reducing waste. At the time, founder and CEO Zuleyka Strasner, who started the company in 2019, had just raised $4.7 million in funding.

Today, the company announced an additional $11.8 million in new seed funding, led by Sway Ventures, to give Zero $16.5 million in funding to date. This comes on the heels of the company launching its sustainable online supermarket with eco-friendly free deliveries in less than two hours.

Strasner told TechCrunch via email that Zero has been “on an incredible journey” since the last funding infusion. The company doubled the size of its team and also doubled the number of markets served, including Los Angeles and the Bay Area markets.

In addition, Zero has more than doubled its customer base while increasing average order value and retention rates. As a result, that has led to an increase in lifetime value and prevented the equivalent of 35,000 plastic bottles or 60,000 plastic shopping bags from ending up in landfills by 2021, she said.

“Starting in January of this year, we completely revamped our service to offer two-hour same-day delivery with no fees or subscriptions, and have seen our customer acquisition take off completely,” added Strasner. “The payback for every dollar invested in growth in 2022 has tripled from what we averaged in 2021.”

Zero messages

Image Credits: Zero messages

While the company had some rapid success in raising capital, its focus has been on a more holistic, sustainable model, Strasner said. She believes the company has one of the most efficient models in the delivery space, thanks in part to its approach to quickly prove the concept and then scale it up, allowing the company to do more with less.

The new capital is moving towards geographic expansion so that Zero can open new hubs to serve more regions. In addition, investments are made in acquiring new customers in order to achieve economies of scale. The bigger the company gets, the more efficient it becomes operationally and the greater the leverage it has over suppliers to advance the sustainable practices it wants to see, Strasner added.

Strasner attributes much of the company’s success to market opportunities. In 2020 and 2021 there was a huge growth in delivery service. Before that, delivery was even just under 10% of US supermarket sales. At the time, the global pandemic increased the need, although Strasner said much of it was not being met.

“A game changer offering that is fast, easy, affordable, high-quality and sustainable will deliver value to customers in more dimensions and meet multiple needs at once,” she added. “This easily translated into our ability to win many customers over from the competition.”

Due to demand, forecasts predict that online share is likely to grow to 11.1% of $1.124 trillion in grocery items by 2022 and then 20.5% of $1.285 trillion in 2026, according to online grocer Mercatus.

Currently, only 9% of plastic is recycled, much of which ends up in landfills and the oceans. This means that even small changes made by individuals to reduce plastic waste can have a big positive impact on the environment, Strasner said.

“A big thing we’ve seen through this pandemic is that people are becoming more aware of the kind of lives they want to live and how decisions we make today affect our future,” she added. “People vote with their dollars – meaning they want organic, clean, green products, which Zero can provide like no other.”

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