A big capital boost for MyWebGrocer. HGGC-- a private equity firm from California-- has acquired controlling interest in the Winooski-based company.
Terms of the deal with HGGC were not disclosed, but The New York Times estimates the deal being in the higher end of a $25 million to $100 million price range.
The company is calling this a re-capitalization. The equity firm HGGC bought control of MyWebGrocer from the Stripes Group which did not have control. This deal now gives HGGC a digital weapon to compete against online giants, like Amazon.com, which are getting into the online grocery business. Just this week Amazon rolled out AmazonFresh to the Los Angeles market after a six year test in Seattle. MyWebGrocer helps supermarket chains develop online grocery shopping systems and currently has more than 140 clients in the U.S.
"If history is any indication, in the last four years we've increased revenue fivefold with Stripes. We've grown 50 percent a year for the last six years. I would expect we'll accelerate on that based on our international expansion plan. I think we're going to do better," said Rich Tarrant of MyWebGrocer.
To put things in perspective, in 2009 MyWebGrocer employed 43 people; today it employs 185 and is looking to fill 23 open positions currently. MyWebGrocer says they expect similar growth with this HGGC deal.
This deal means money to spend for MyWebGrocer. The Winooski company is looking at buying technology businesses-- possibly internationally-- which it says they couldn't do without this kind of capital.
As far as who will manage MyWebGrocer-- that stays the same. Owners say they will simply just have to run certain business decisions by managers at HGGC. They do not expect any big changes.