John Pletz On Technology
Retailer Foxtrot Market raises $42 million
New investors include Joe Mansueto and former Whole Foods' co-CEO.
John Pletz
Technology, airlines, cannabis
Foxtrot Market Chief Operating Officer Sumi Ghosh, left, and CEO Mike LaVitola.
Some big-name investors are betting Chicago startup Foxtrot Market has a fix on the future of retailing.
The company raised $42 million from investors who include Morningstar founder Joe Mansueto and Walter Robb, former co-CEO of Whole Foods. The investment was led by Almanac Insights, a New York-based venture fund, and Monogram Capital Partners, based in Los Angeles.
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Foxtrot operates small, upscale convenience stores with an online delivery service. Like other grocers, it has benefited during the pandemic.
Its e-commerce business tripled last year, compared with sales that doubled in 2019. The company gets about half its sales from in-person sales and half from online. Retail also grew, says founder and CEO Mike LaVitola, though he declined to disclose specific financials. With this latest round, the company has raised $65 million since it was founded in 2014.
Foxtrot has 10 stores, eight of them in Chicago and two in Dallas. It will open nine stores this year, including two in Washington, D.C., set to open in about two weeks.
LaVitola says the retail stores, about the size of a 7-Eleven, are the catalyst for online sales. "We lead with retail," he says.
The stores draw coffee drinkers in the morning, lunch-seekers in the middle of the day and a wine-and-beer crowd in the evening. That means stores are the key to keeping the fast-growing online sales on the rise.
The challenge ahead is "taking what's special about the brand and scaling it," LaVitola says. "It's nice to open two stores a year. How do you open 10, 20 or 30 a year? How do we transform our e-commerce visits?"
Robb, executive-in-residence at Chicago-based S2G Ventures who helped oversee Whole Foods' dramatic growth, should provide valuable guidance. LaVitola also will get a lot of help from new Chief Operating Officer Sumi Ghosh, a 13-year Starbucks veteran who ran its Midwest operations from Chicago and recently oversaw its Roastery and Reserve stores. "I reached out to him cold on LinkedIn, which never works," LaVitola says. "He lived in Chicago after returning from Starbucks India."
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