Zero Grocery is on a mission to deliver your groceries in two hours and in a way that doesn’t hurt the planet.
The plastic-free grocery, home and personal care delivery startup is one of the companies we featured two years ago when discussing venture capital interest in businesses 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 another $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 grocery store offering eco-friendly free deliveries in less than two hours.
Strasner told TechCrunch via email that since the last funding infusion, Zero has “been on an incredible journey.” 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 more than doubled its customer base, while also growing average order values 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 grocery bags, from going into landfills in 2021, she said.
“Starting January this year, we completely revamped our service to offer same-day two-hour delivery with no fees or memberships, and have seen our customer acquisition completely take off,” Strasner added. “The payback on any dollar invested in growth in 2022 has tripled over what we averaged in 2021.”
Though the company experienced some quick successions in terms of 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 of quickly proving out the concept, and then following with scaled-up execution, enabling the company to do more with less.
The new capital will go into geographic expansion so that Zero can open new hubs in order to service more regions. In addition, it will be invested in acquiring new customers to generate greater scale. The bigger the company gets, the more efficient it becomes operationally, and the greater leverage it has with vendors to move forward the sustainable practices it wants to see, Strasner added.
Strasner attributes much of the company’s success to market opportunity. In 2020 and 2021, there was huge growth in delivery service. Indeed, prior to that, delivery was just under 10% of U.S. grocery sales. That’s when the global pandemic created a surge of need, though Strasner said much of that was unmet.
“A game changer offering that’s fast, convenient, affordable, high quality and sustainable provides value to customers across more dimensions, satisfying multiple needs simultaneously,” she added. “This easily translated into our ability to win over many customers from the competition.”
Due to demand, projections say that the online share is likely to grow to 11.1% of $1.124 trillion in grocery sales in 2022 and then be at 20.5% of $1.285 trillion in 2026, according to online grocery specialist Mercatus.
Currently just 9% of plastic is recycled, with much of it going into landfills and oceans. This means that even small changes made by individuals to reduce plastic waste can add up to a big positive impact on the environment, Strasner said.
“One big thing we have seen through this pandemic is folks becoming more conscious about the types of lives they want to live and about how decisions we make today affect our tomorrow,” she added. “People are voting with their dollars — this means they want organic, clean, green products, which Zero is able to provide like no other.”