The complicated task of exporting does not come naturally to small purveyors of natural and organic foods—the so-called wellness market—but Philadelphia-based Grovara LLC hopes to change all that.
Privately held Grovara, which has developed an ecommerce platform specifically for international sales in the health-and-wellness market, in March raised $5.5 million in a seed funding round led by David Pottruck, the former chief executive officer of financial-services giant Charles Schwab. Pottruck became Grovara’s executive chairman as part of the deal, which included six other investors.
Grovara’s top brass does not have modest goals. “We’re looking to transform global commerce,” says Abu Kamara, co-founder, CEO, and former company president. Peter Groverman, co-founder and former CEO now in the newly created position of chief innovation officer, adds that the seed round’s proceeds will be used for “a global platform for American brands to go overseas.”
Fast growth in 2020
The company, founded in 2010 but which embarked on its current path only a couple of years ago, is growing fast. Revenue, which wasn’t disclosed but comes mostly from transaction fees, grew 2.5 times last year over 2019’s revenue despite the Covid-19 pandemic. And Kamara expects revenue to increase fourfold this year. The new funding will go toward expanding Grovara’s current headcount of 20 to about 35 before year’s end, most in sales and marketing, as well as enhancing the platform.
Grovara’s technology connects U.S. wellness product suppliers such as GT’s Living Foods, Wholesome Sweeteners, Honey Stinger, True Citrus, and That’s It with retailers in more than 40 countries. They include Walmart Mexico, Whole Foods U.K., Latin America’s Cencosud, and Costco Taiwan.
“We have about 100 suppliers right now, and they are all brands,” says Kamara. He expects to add about 250 brands this year and hopes to have 1,000 in 2022.
Pottruck figures U.S. wellness brands have annual domestic sales of about $100 billion, but only $10 billion in international sales. Among Grovara’s customers, more than 90% have come to the company without any international sales experience, according to Kamara.
Tools to aid exporting
Grovara’s platform handles a number of basic functions that enable wellness suppliers to export, and foreign retailer buyers to learn about and purchase those suppliers’ products. “It does everything to take the brand from their warehouse to their destination country,” says Kamara. In one example, the system generates documentation to meet countries’ varying rules for purchases of different types of imported products at the same time, such as a retailer in France ordering juice and popcorn in a single sale. “That’s the hurdle,” he says. “Now the users don’t even have to think about it.”
Grovara works closely with Chicago-based SPINS LLC, a data-services provider that enables suppliers to assess their performance and retailers to identify wellness market opportunities. SPINS was an early investor in Grovara and participated in the recent funding round. Through Grovara, SPINS for the first time will get access to international data, according to Kamara. “SPINS is embedded in the platform,” he says.
Pottruck says he originally invested in Grovara as a favor to his friend David Groverman, Peter Groverman’s father. “But when they approached me several months ago looking for more capital, I took a serious look at the company and realized these guys had built a one-of-a-kind B2B international marketplace for selling and buying U.S.-made natural and organic food products to buyers across the globe,” Pottruck tells DC360 by email. “This is a market that has up until now operated using emails and spreadsheets and UPS to conduct international trade.”
Pottruck will have some day-to-day management responsibilities as executive chairman, but he says his main duties will be to help top management add scale to their system and “to keep asking good questions that inspire creativity, introspection, and growing momentum.”
Automated order process and pallet builder
One project underway at Grovara is its so-called “pallet builder,” which will include an automated order process and aims to load pallets in the most efficient way based on the dimensions of the products being stacked. The service will use an algorithm “that can figure out how to stack the brands,” says Groverman. But it’s a complicated undertaking. “We’re not there yet,” he says.
A longer-term goal is to develop an in-house payment system. Work on that probably won’t even begin until the summer of 2022, according to Kamara. Grovara currently uses San Francisco-based ecommerce merchant processor Stripe Inc. to handle payments. An in-house platform would give Grovara more control over its payment processes as well as fee revenue that currently goes to Stripe. “Like Alibaba has Alipay, we see an opportunity for Grovara to capture that revenue stream,” Kamara says.
Other features under consideration include factoring for international payments and helping customers sign up for trade finance insurance. “There’s a lot of things you can do on the payments side,” says Groverman.
Also on the drawing boards is a Series A funding round of potentially $7 million to $10 million. So far Grovara has raised $6.5 million. Besides Pottruck and SPINS, the other investors in the seed round were Bluestein Ventures, Spiral Sun Ventures, Siddhi Capital, CEAS Investments, and E and A Venture Capital LLC.
Jim Daly is a Mount Prospect, Illinois-based freelance journalist covering business and technology.
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