As e-commerce continues to disrupt a huge segment of brick-and-mortar retail, Chicago startup Foxtrot is proving there's still value in the neighborhood corner store, and it just raised a round of funding to expand its retail and online marketplace for everyday essentials.
Foxtrot announced Thursday that it has raised a $6 million Series A round led by Fifth Wall, a real estate-focused venture capital firm. Other investors include Revolution’s Rise of the Rest Seed Fund, Lerer Hippeau, Collaborative VC, BoxGroup, Maveron, M3 Ventures and The University of Chicago.
Foxtrot will use the funding to add more retail locations in Chicago, expand its on-demand e-commerce delivery business, and launch retail locations in other markets by 2019.
Founded in 2013, Foxtrot has opened four corner store locations in Chicago, offering customers things like beer, wine, food, gifts and other everyday essentials. Foxtrot also incorporates coffee shops and bars into its locations, giving customers more than just grab-and-go items. In its Lincoln Park location, for example, Foxtrot partnered with Jeni's Ice Cream to give customers a hybrid corner store-ice cream shop experience. Its other locations are in the West Loop, River North and Wicker Park.
CEO and CO-Founder Michael LaVitola said that the online business---which offers on-demand app delivery of alcohol, food and everyday essentials in 60 minutes---still beats brick-and-mortar in terms of revenue, but it's "pretty darn close to 50-50."
"There's a real need for this sort of neighborhood corner shop ... and no one's doing a great job of it."
LaVitola wouldn't give Foxtrot's specific revenue numbers, but he said sales were up 250% last year. The startup has around 60 employees, including retail staff and delivery drivers.
Even as online shopping continues to grow, corner stores remain an important staple for neighborhood residents in cities across the U.S. That fact became abundantly clear last year when a startup called Bodega, launched by two ex-Google employees, set out to replace local corner stores with its high-tech vending machines for everyday items. The startup was flooded with criticism, and many people on social media were even offended by the name itself, calling it a slap in the face to the local business owners that the startup was looking to disrupt. Its founders eventually apologized to those who were offended by its name.
"Foxtrot has read the pulse of the retail industry by blending e-commerce, on-demand delivery, and brick-and-mortar experiences,” Ben Lerer, managing partner at Lerer Hippeau, said in a statement. “The company is addressing retail's most pressing pain points while building a direct-to-consumer business that's deeply resonating with its first market in Chicago."
