Ethnic goes mainstream: EthnicGrocer.com searches the globe to provide American home chefs with easy access to high-quality authentic products
- Market validation: Innovative application of technology leads to $34 million in financing by Kleiner, Benchmark, Integral and others
Because it capitalizes on the power of the Internet to deliver African Fufu Flour and Filipino Sweet Sugar Palm Fruit to Paducah, Ky., EthnicGrocer.com Inc. announced today a $34 million first closing of its Series C financing with several leading venture capital firms and strategic partners. At a time when venture capital financing is drying up, securing $34 million is a major vote of confidence from the VC and investment banking communities. Participating in this first closing are, among others, Integral Capital Partners, Kleiner Perkins Caufield & Byers, Amerindo Investment Advisors, Merrill Lynch, Benchmark Capital and KB Partners.
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“With soaring demand across the country for international products, there couldn’t be a better application for the Internet,” says Parry Singh, President and CEO, EthnicGrocer.com Inc. “The traditional distribution system doesn’t work. Our Internet solution permits people to select and receive hard-to-find products from all over the world easily and affordably.”
“The market for ethnic products will be totally transformed by the Internet,” says Roger McNamee, co-founder of Integral Capital Partners. “With its direct relationships to importers, its exceptional Web retailing capabilities and brilliant management team, EthnicGrocer.com is the clear leader in the hottest sector in e-tailing.”
The company’s four Web sites–Namaste.com, GongShee.com, QueRico.com and EthnicGrocer.com–offer investors attractive business models on many fronts:
- The $105 billion market for ethnic goods is expected to grow rapidly, because of explosive ethnic population growth in the Latin American and Asian American communities.
- Product margins average two times that of Amazon.com.
- Cost of acquiring new customers is low because of strong word-of-mouth marketing and the availability of low-cost marketing vehicles in the ethnic communities.
- Even in major cities, research shows U.S. consumers travel up to one hour to purchase ethnic goods.
- In smaller cities, these products are often not available at all.
- EthnicGrocer.com was named one of this year’s “50 Most Incredibly Useful Sites” in Yahoo! Internet Life and has been lauded for its customer service by Food & Wine magazine, offering thousands of products from over 20 countries, including hundreds of hard-to-find items a grocery store could never afford to carry.
“Our perception of EthnicGrocer.com as a revolutionary business has not changed since our initial investment in November 1999,” says Vinod Khosla, general partner, Kleiner Perkins Caulfield & Byers “It is a true, born-on-the-Web business model that cannot be replicated in a brick-and-mortar format. The company has built the foundation of a defendable long-term business by quickly and successfully implementing an exceptional international supply chain technology platform.”
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By GlobalDataAbout EthnicGrocer.com
EthnicGrocer.com, Inc. has engineered a technology-centered global supply chain that sources the largest selection of ethnic foods and products from around the world for businesses and consumers. The virtual ethnic grocery store offers more than 20,000 high-quality, affordable, ethnic ingredients from all over the world, as well as easy-to-follow recipes and interesting information about different cultures. The company developed and launched the following four Web store fronts on top of its technology and supply chain infrastructure: targeting the Asian-Indian market, serving the Chinese market, targeting the Latin American market and marketing to cooking enthusiasts. These virtual ethnic stores provide the widest range of products used by consumers in each culture. One-stop shopping at Namaste.com, GongShee.com or QueRico.com for groceries, cooking utensils, music, movies, health and beauty aids, as well as religious products and traditional cultural merchandise offers new convenience and valuable benefit to the respective ethnic populations. EthnicGrocer.com Inc. is a private company headquartered in Chicago. For more information, please visit or call (312) 762-2600.
