• Notched three years of positive EBITDA
• Rollup strategy expected to continue

GrubMarket, a food supply chain and delivery group, is well-positioned to pursue an initial public offering as soon as next year, according to two sources familiar with the situation.

The San Francisco-based company is expected to take active steps toward the IPO in the second half of 2025, said both sources, as it waits for a more favorable market environment.

CEO Mike Xu is keen to list on a New York stock exchange and the company has been preparing for an IPO for a long time, said one of the sources. “They would likely have gone public by now had the market not turned about a couple of years ago,” the source said.

To prepare, GrubMarket has made independent board appointments, conducted regular audits and put financial reporting systems in place, said the second source.

Investors are also willing to wait until the time is right, this source added. GrubMarket’s backers include 301, Squarepoint Capital, Portfolia, Grosvenor Food & AgTech, Tiger Global, BlackRock, Liberty Street Funds, Walleye Capital, Celtic House Asia Partners, and Apeira Capital.

A syndicate has not yet been formalized, both sources agreed. The company had previously reportedly had talks with banks including Goldman Sachs, Morgan Stanley, and JP Morgan.

Grub them all

The execution side of the company’s strategy continues to beat, if not exceed, performance projections, the second source said. Despite competing with a large spread of food tech companies in the US, GrubMarket is on track to reach USD 2.5bn in 2024 net revenues and has managed to maintain three years’ worth of EBITDA profitability, the sources said.

Both sources said annual EBITDA is in the tens of millions of dollars.

The company’s growth strategy has largely relied on M&A aimed at geographic expansion and vertical integration, especially by taking over companies across the supply chain to streamline operations and plug them into their broader network of customers, the sources noted.

The company has closed roughly nine acquisitions this year alone, according to Mergermarket‘s database, including the newly reported deal with New York-based Asian foods and dishes sale platform FreshGoGo.

Next year, if volatility subsides and interest rates lower, the company will find itself in a better market cycle to garner the strong valuation and aftermarket performance it desires, both sources concurred.

The first source said the company is expected to eye a valuation of at least USD 5bn and above and will be benchmarking itself to a swath of e-commerce players, software companies and distribution-based operators. The second source cited tangential comps including Uber [NYSE:UBER], Instacart [NASDAQ:CART] and DoorDash [NASDAQ:DASH].

One sector banker said investors will take a hard look at the sustainability of its margins amid a competitive food distribution and supply chain sector with a high potential for disruption.

Operational challenges that could affect its supply chain will also be flagged as potential vulnerabilities to its equity story, he added, particularly as its network expands globally.

GrubMarket did not respond to requests for comment.