Despite the uncertainty surrounding the U.S. President Trump's tariff hikes, food e-commerce startup GrubMarket is forging ahead with its growth plans, announcing a new equity round of $50 million on a raised valuation of over $3.5 billion. This Series G funding round is a significant milestone for the company, which has been rapidly expanding its food distribution business and technology capabilities.

The funding round was led by Liberty Street Funds, 3Spoke Capital, Pinegrove Capital Partners, ROC Venture Group, Portfolia, Pegasus Tech Ventures, and Joseph Stone Capital, along with other unnamed backers. GrubMarket's valuation has been on a swift upswing, with the company's last funding round, a Series E in 2021, raising $120 million at a $1.2 billion valuation. A year later, the company raised a Series F of $120 million at a $2 billion valuation.

GrubMarket's growth has been driven by its successful food distribution business, which is estimated to be worth over $1 trillion annually. The company's revenue is expected to reach $2.4 billion this year, with CEO and founder Mike Xu stating that the company is profitable on an EBITDA basis. GrubMarket plans to use some of its cash reserves to make more acquisitions, both of startups and legacy businesses, as the food e-commerce world consolidates.

The company's technology focus is on building more AI-powered solutions to improve its customers' business management capabilities. GrubMarket has developed a comprehensive enterprise AI software for the food supply chain industry, which includes components that provide business intelligence, an AI analyst to help customers plan and manage their cash flow, and an ordering assistant. The AI assistant is designed to read and process unstructured data from various offline sources, such as voice mail messages and post-it notes, and convert it into a common format for use throughout the system.

GrubMarket's expansion plans are not limited to the U.S. market. The company has already established a presence in Argentina, Canada, Chile, Colombia, Egypt, India, Mexico, South Africa, and Spain, and plans to further expand its global footprint. Its procurement and distribution network covers over 70 countries, making it a significant player in the global food supply chain industry.

Despite the potential implications of Trump's tariffs on the food distribution industry, Xu remains optimistic, stating that the company's business is not directly impacted by the tariffs at present. However, he acknowledges that the tariffs could lead to higher prices, supplier collapses, and a drop in demand in the future. For now, GrubMarket is focusing on its technology and business model, which Xu believes will be crucial for the industry's survival in the 21st century.

The company's growth and success have not gone unnoticed, with Kevin Moss, president of The Private Shares Fund and MD of Liberty Street Advisors, stating that GrubMarket has "rapidly grown into a major food technology company by leveraging best-in-class AI-powered software solutions and strong operational discipline." Moss added that the company's commitment to sustainability has benefited farmers in California and across the U.S.

As GrubMarket continues to expand its business and technology capabilities, the company's future plans remain unclear. While Xu did not comment on potential IPO plans, the market seems open to scaled-up startups staying private and exploring alternative funding arrangements.

In conclusion, GrubMarket's latest funding round is a significant milestone for the company, which has established itself as a major player in the food e-commerce and distribution industry. As the company continues to expand its global footprint and technology capabilities, it will be interesting to see how it navigates the challenges and opportunities presented by the rapidly changing food supply chain industry.