Door to Door Organics patiently grows for 17 years then explodes with a $25.5M Series B round

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Online grocery delivery service Door to Door Organics has just secured $25.5 million in Series B funding. Founded in 1997, before the first Internet bubble burst, Door to Door Organic patiently outlasted its early rivals and is only now taking on venture capital to scale. The company’s CEO Arnold Chard said the company’s 2014 run rate revenue is expected to be $35 million, and in the last two years the company has raised about $29 million. Funding in this latest round came from the Arlon Group, a food and agriculture investment firm. 

 

Door to Door Organics customers can choose different box sizes online to be delivered to their homes weekly. The boxes contain organic fruits and vegetables, as well as other items like organic eggs, coffee, tea and bread. Over the last 17 years, the company has honed their products and operations into a profitable business. Only in 2012 did the company take a Series A investment of $3.25 million. 

 

“We’re not trying to be everything to everybody,” said CEO Chad Arnold to the Wall Street Journal. “That’s not what people are asking for now. Everybody goes to four or five stores. We can play a role like Trader Joe’s in a shopper’s life, and be more focused and curated and fresh-driven.”

 

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By patiently developing their business model and not rushing to scale, Door to Door said it has built a profitable business with a limited geographic reach. Currently the company sells into five regions: Colorado, Chicago, Kansas City, Michigan and the Tri-State Region (New York, New Jersey and Connecticut). It will be using this latest round of capital to expand to new regions of the United States, especially the Midwest.

 

“We can be profitable at 2,000 or 20,000 or 200,000 customers,” said Arnold. “We don’t need to race to revenue and lose a lot of money along the way.” 

 

While many tech firms fuel their ambitions early with heavily speculative rounds of capital, Door to Door’ Organics’ capital light, capital late approach appears to give the company the best of both worlds: venture capital backing and a sustainable business model.

 

“We believe online grocery is at an inflection point and is ready for significant growth,” said Arlon Group managing principal Michelle Brooks to the Wall Street Journal. “We looked at several models and found Door to Door more attractive in its geographic focus and its asset-light model…It’s a more profitable model than others we’ve seen and is capable of going quickly into new markets.”