GrubMarket Bets on AI and Acquisitions Amid Trade War Fears

The food industry can never become outdated. But while the people in the US are in a different mood with President Donald Trump’s tariff and budget-cutting policies and the prospect of a trade war among the world’s biggest economies have created uncertainty, GrubMarket has secured a fresh $50 million in Series G funding, pushing its valuation beyond $3.5 billion from a range of investors, including 3Spoke Capital, Joseph Stone Capital, Liberty Street Funds, Pegasus Tech Ventures, Pinegrove Capital Partners, Portfolia, and ROC Venture Group. Additional undisclosed backers also contributed.

The company has attracted a deep investor pool over the years. While Battery Ventures, Tiger Global, and Y Combinator have been notable participants, PitchBook data suggests GrubMarket’s capitalization table includes more than 100 investors. The latest valuation represents a significant climb from past rounds: in 2021, the company raised $120 million in a Series E round at a $1.2 billion valuation. A year later, a Series F round brought in another $120 million, doubling the valuation to $2 billion. (PitchBook’s listing of a Series G from last year is reportedly incorrect.)

GrubMarket operates as an online farmers market, connecting North American consumers with local fresh produce suppliers. Its ambitions go beyond simple marketplace transactions. It aims to modernize the U.S. food supply chain through technology.

Food distribution is an enormous sector, valued at an estimated $1 trillion annually. Within this space, GrubMarket has expanded aggressively, seeing a surge in demand during the COVID-19 pandemic. This expansion, coupled with a strategic acquisition spree, has steadily increased both revenues and valuation. In 2024, GrubMarket reported $2 billion in revenues. For 2025, it projects a jump to $2.4 billion. CEO and founder Mike Xu confirms the company remains profitable on an EBITDA basis.

GrubMarket has made it clear that it will use its growing financial firepower for further acquisitions. With consolidation already reshaping the food e-commerce sector, the company sees an opportunity to absorb both struggling startups and legacy businesses.

“As GrubMarket grows bigger, we have a chance to deal with bigger acquisitions,” Xu said. “The industry has always had wholesalers and distributors of all sizes. When owners look for an exit or want to embrace new technology, we provide an option.”

The company has already demonstrated its ability to turn around struggling ventures. Good Eggs, a once-floundering food distribution startup, was on the brink of collapse before being acquired by GrubMarket. Today, Xu says it is profitable under GrubMarket’s stewardship.

While food distribution remains GrubMarket’s primary business, the company is increasingly positioning itself as a technology-driven enterprise. AI plays a central role in this transformation.

GrubMarket recently released an enterprise AI software suite for the food supply chain. Key components include business intelligence tools, an AI-powered financial analyst to help customers with cash flow planning, and an AI ordering assistant. These tools address inefficiencies in the industry, where data is often scattered across offline formats like voice mails and handwritten notes. By integrating AI, GrubMarket aims to standardize and streamline these processes.

Another major AI development is the upgrade of GrubAssist, the company’s AI assistant. Recognizing that every distributor and wholesaler uses different internal terminology, GrubMarket has introduced the AI Model Configuration and Enterprise Dictionary. This feature allows businesses to train GrubAssist on their unique codes and product names. Instead of forcing employees to adjust to rigid software, the AI adapts to their existing way of working. A distributor might ask, “How many crates of apples do we have left?” and GrubAssist will seamlessly translate that into the correct database query.

GrubMarket is also integrating AI into its ordering processes. The introduction of AI Orders automates order processing, eliminating errors and reducing labor costs. Instead of manually handling orders arriving via phone, text, or email, the AI converts them into standardized digital entries and integrates them into ERP systems.

Beyond the U.S. and Canada, GrubMarket has extended its operations to multiple international markets, including Argentina, Chile, Colombia, Egypt, India, Mexico, South Africa, and Spain. In total, its procurement and distribution network spans 70 countries, with further expansion on the agenda.

Despite its rapid growth, Xu remains tight-lipped about any immediate plans for a public listing. In today’s market, many large-scale startups are opting to stay private, leveraging private equity arrangements or share buybacks rather than pursuing an IPO. GrubMarket appears content with this strategy for now.

Kevin Moss, president of The Private Shares Fund and MD of Liberty Street Advisors, acknowledges the company’s trajectory. “GrubMarket has rapidly grown into a major food technology company by leveraging best-in-class AI-powered software solutions and strong operational discipline,” he said. “The company’s growth and scale are supported by established business fundamentals and a commitment to sustainability, benefiting farmers in California and across the U.S.”

Xu has not commented on how Trump’s tariffs might impact GrubMarket’s operations, noting that no direct effects on logistics or food trade have materialized yet. However, broader implications such as rising prices, potential supplier bankruptcies, and shifts in demand remain a looming concern.

For now, GrubMarket is doubling down on AI and acquisitions as the pillars of its next growth phase.