Martie’s Louise Fritjofsson Shares Grocery-Focused Expansion Plans
Plus, DoorDash's high-growth 2023
For today’s holiday edition, we’re doing something different; we’ve got an in depth interview with Louise Fritjofsson, Co-Founder & CEO of Martie. The four-time founder recently raised $7 million from Upfront Ventures to take on the discount organic grocery sector with a delivery-first model that’s worth learning from. Oh, and before we get to that, let’s take quick look at DoorDash’s latest growth-tastic financial results.
This week’s edition is brought to you by Gridwise.
FINANCE | DoorDash GOV Up 25% to $66.8 Billion
Last week, DoorDash released its Q4 and FY 2023 financial results, and the overall picture is that of a company still in growth mode. Marketplace GOV rose 25% YoY, hitting $66.8 billion. In December, the company logged a record number of monthly average users: 32 million; DD also ended the year with a record 18 million DashPass and Wolt+ premium subscribers. But while revenue rose almost 32%, investors were disappointed to see GAAP net loss for the year come in at $565 million, even if that was an improvement from the year before, when DD lost $642M in Q4 alone.
The Big Picture: DoorDash is pointing folks to its Adjusted EBITDA that beat expectations at $363 million; CFO Ravi Inukonda painted a growth picture, saying “In 2023, we saw more merchants, more consumers, and more Dashers use our platform than ever before. DoorDash is continuing to grow at a pace that is unmatched in our industry, and this was a record year across our business––thanks to investments we made in our product and our services, across the globe.” Looking at the competition, he sounds about right: Instacart GTV grew 5%, Delivery Hero GMV basically treaded water at +1.5% and Uber Eats GBV was up a healthy 19%. So while DD currently has the mantle for growth, its post-earnings stock performance suggests the market seems to still be looking for earnings to match.
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INTERVIEW | Martie’s Louise Fritjofsson Shares Insights
Modern Delivery: Tell us about Martie, and what inspired you to start the company?
LF: My co-founder, Kari Morris, and I started Martie in 2021 originally to improve upon the distribution options for food brands. As producers ourselves, we realized the lack of solutions available for surplus inventory and knew there had to be a better way than perfectly good food ending up in landfill, contributing further to our massive food waste crisis. As mothers shopping for our families and seeing costs soar at grocery stores, we realized that solving one problem, could solve another. With 40M Americans experiencing food insecurity, having a convenient, low cost option for groceries could help millions.
Martie is an online discount grocery store stocked with surplus inventory from food brands like Kind, Annie’s, Quaker, Tate’s, Bonne Maman and thousands more. We sell goods directly to our shoppers for 40-70% less than traditional grocery stores, with no subscriptions or commitments. On average, a Martie shopper (we call them Smarties!) saves $54 per order and saves 25 lbs of food from going to waste. To date, we’ve saved our shoppers over $7M and saved over 4M lbs of food! We’ve recently been expanding our offering to work with household brands like Mrs. Meyer’s and W&P, and we’ve been working with specialty brands such as Fly By Jing, Omsom & Acid League to name a few.
“we’ve changed warehouse partners three times, to accommodate our growth”
MD: What’s changed, and what have you learned, since your launch in 2021?
LF: When we launched in November 2021, we were shipping exclusively in our home state of California. By keeping our shipping restricted by state lines, and in a state with a large population, we were able to understand what shoppers were looking for from us, and we were able to really understand our shipping costs. We developed a successful, scalable proof of concept before continuing to expand our regions and reach millions more Americans. Since our launch, we’ve changed warehouse partners three times, to accommodate our growth, and be able to work with more brand partners. Warehouse sizes are real, and we need to make sure our partners are ready to scale with us! We are incredibly excited about this year!
MD: On to the good stuff: tell us about your current logistics and delivery setup.
LF: The magic here is speed. Speed in which we work with our brand partners to rescue their inventory, speed in which that inventory gets to our warehouse, speed in which our products get uploaded to the website, and speed at which we can start selling these great products. All told, we can place an order with our brand partners and the inventory can be up on the website in under 5 days, in customers' carts and out the door. We don’t offer expedited shipping or air freight for our customers because we don’t believe in the necessity of that carbon footprint. For customers, we ship via UPS Ground.
At our warehouse, we’ve created a grocery store! The staff at our warehouse are essentially your grocery shoppers, traveling through the aisles with a cart and a scanning device. Once your order has been picked, over to the packers to wrap up everything, slap a label on the box, and get it shipped out to our thousands of customers.
MD: How do you see that evolving in the next few years?
LF: More and bigger! Our near term future includes more warehouses with a bigger footprint. We’re keen to work with more and more brands, offering more selection to our daily shoppers. Currently we have 600-800 items on the site at any given time, and we are looking to double that number.
MD: Grocery is a tricky sector: low margins, high expectations. What are some of the special ways you make it work, and how do you compete for a customer that might expect their almond butter right now, even if they’re getting a great deal?
LF: Great question! Our model is at its core different from other business models in the space. By focusing exclusively on shelf stable products and core categories such as bath & body, home decor, kitchenware, household and pet, we can manage our logistics with less risk, and focus on our main value proposition: pricing. We are relentless about getting our shoppers the best deal out there, and they can rely on us for that.
However, shipping is expensive, anyway you slice it. So at Martie, we compromise speed of delivery, in favor of amazing deals on the site. Our customers understand that their order will take 1-5 days to deliver, based upon their location, and plan for it! The deals are worth it! Plus, our online-only business model means we can conveniently notify shoppers when their favorite items are back in stock, or when there’s low inventory on something they’ve bought before. Our app makes it easy for shoppers to have a cart going, and get updates on every shipping stage for their order. So, while we don’t have same-day delivery, we make up for it in our pricing and ease of ordering!
MD: If all goes well, would you want to evolve Martie into a brand that could also stock fresh produce, or could deliver essentials same day?
LF: Anything is possible of course! At the moment, we are more excited for the opportunity to be your go-to with everyday shelf stable goods, seeing a future in categories such as health & beauty, nutrition and technology.
“There’s enough food to go around, it’s the going around we are here to fix.”
MD: Any parting advice for the industry?
LF: We are proud to be here, building a business that makes a positive impact for our brand partners, for our Smartie shoppers and for our planet. There’s enough food to go around, it’s the going around we are here to fix. And, even though we’re here talking about positive unit economics, trends in the industry, venture capital funding and important business metrics, we’re also here to have a bit of fun with our shoppers. There’s a reason you see fun colors on our website like soft purple and bright yellow to go along with the treasure hunt mentality. We want the whole experience of shopping to be fun and enriching. No one needs to feel bad about shopping for discounts. At Martie, we’re proud to be cheap!
A Few Good Links
India wonders if a surge in Valentine’s-related deliveries means a rash of kink or chor police (Google “chor” and the latter Hinglish makes sense.) Blackstone invests in 7 Brew Coffee. Roark Capital considers Inspire Brands IPO, fresh off the Vromo acquisition. Restaurant Brands International hopes to hit 40k stores by 2028. Toast cuts 550 heads.
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