Mercato, which provides e-commerce tools to small grocers and specialty food stores, raises $26M Series A led by Velvet Sea Ventures (Sarah Perez/TechCrunch)

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The epidemic altered how individuals buy for necessities like groceries and other daily necessities. After increasing from 3.4% prior to the pandemic to 10.2% as of 2020, online grocery sales in the United States are predicted to reach 21.5% of all supermarket purchases by 2025. One company that is benefiting from this trend is Mercato, an online grocery platform that makes it simple for specialised food shops and smaller supermarkets to go online. According to the firm, Mercato has officially closed on $26 million in Series A investment after aiding in the growth of its merchant sales by 1,300% in 2020.

The investment arm of Delivery Hero co-founder Lukasz Gadowski, Team Europe, participated in the deal, which was led by Velvet Sea Ventures. For the latest round, the original seed investors Greycroft and Loeb.nyc also participated, and Mike Lazerow of Velvet Sea Ventures has now been added to the board of Mercato.

Bobby Brannigan, who grew up working at his family’s Brooklyn grocery business, created Mercato in 2015. Brannigan later departed for college, but instead of taking over the company as his father had anticipated, he bootstrapped a marketplace for college textbooks called Valore Books to $100 million in sales. After selling the company, he turned his attention back to the family firm and saw that everything was still carried out in the same manner as before.

Brannigan notes that the man “had a very rudimentary website, no e-commerce, no social media, and no point-of-sale system.” “I promised to build what you require, I said. I had the chance to assist my father in a way that I was knowledgeable about,” he continues.

In order to construct the software systems to update his father’s store, Brannigan enlisted the aid of certain engineers from his previous business, including the co-founders of Mercato, Dave Bateman, Michael Mason, and Matthew Alarie. The team quickly saw, however, that it might assist more than just Brannigan’s father; it could also help the 40,000 independent grocery stores across the world that are just like him compete more effectively with the Amazons of the world.

The outcome was Mercato, a platform-as-a-service that enables smaller supermarkets and specialised food stores to list their goods online for pickup or delivery without needing to work with a company like Instacart, Amazon Fresh, or Shipt.

The current system incorporates an e-commerce website and data analytics platform that aids retailers in learning more about their customers’ needs, where they are situated, how to price their goods, and other information that enables them to manage their business more effectively. Brannigan adds that Mercato is now working on integrating a supply platform to assist the retailers in purchasing merchandise through their platform.