Foxtrot Convenience Store Expansion

Foxtrot Secures $100 Million to Expand Retail Presence

Foxtrot is redefining the modern convenience store experience and has recently obtained $100 million in Series C funding. This investment will facilitate the expansion of its physical locations, with plans to open 50 new stores over the next two years.

Company Overview and Early Growth

Our previous coverage of Chicago-based Foxtrot dates back to early 2020, shortly before the onset of the global pandemic. At that time, the company had just secured $17 million in a growth round.

Foxtrot initially provided customers with the flexibility to shop both in-store and online, offering delivery services alongside its retail locations in Dallas and Chicago.

Reimagining the Convenience Store

Founded in 2014 by Mike LaVitola and Taylor Bloom, Foxtrot began as a digital-first commerce platform. It subsequently integrated a physical retail component.

The company actively seeks out exceptional food products from local artisans, complementing its existing range of coffee, prepared meals, and wine.

Market Expansion and Service Offerings

Following the previous funding round, Foxtrot extended its reach to Washington, D.C. and has since established a total of 16 retail locations across these three cities.

Customers benefit from a variety of convenient services, including five-minute pickup, rapid on-demand delivery, and the Foxtrot Anywhere nationwide shipping option.

Private Label Success

A year ago, Foxtrot ventured into private label products, which now represent approximately 30% of its retail offerings.

These private label items contribute to nearly half of the company’s total retail and e-commerce sales, according to CEO LaVitola. He anticipates the launch of around 200 new private label products in the coming year.

Funding Details and Investors

The latest funding round was spearheaded by D1 Capital Partners, with participation from existing investors including Monogram Capital, Imaginary, Almanac, Wittington, Fifth Wall, Beliade, Lerer Hippeau, and Revolution.

This Series C investment brings Foxtrot’s total funding to $160 million.

The Impact of the Pandemic

While the pandemic initially drove a shift towards online sales, LaVitola observed an unexpected increase in foot traffic to Foxtrot’s retail locations.

He noted that visiting a Foxtrot store offered a more relaxed and enjoyable way to discover new snacks, becoming a pleasant addition to people’s daily routines compared to traditional grocery shopping or dining.

Growth and Future Expansion Plans

The company experienced a doubling of its business last year, and the success of its retail stores is a key factor in its decision to allocate the new funds towards opening 25 new stores in 2022.

Planned locations include Boston’s Back Bay, two stores in Austin, and additional sites in Chicago – Willis Tower, Tribune Tower, and near Wrigley Field.

In 2023, Foxtrot intends to expand into new markets such as New York, Nashville, and Miami, while also strengthening its presence in existing cities.

Focus on the Retail Experience

“We’ve observed a significant trend of customers embracing the retail experience, which is now the primary driver of customer acquisition for our online business,” LaVitola stated.

“While delivery remains important, customers are increasingly recognizing the value of our curated merchandise. Consequently, we are dedicating 90% of our efforts to enhancing the in-person experience, focusing on sourcing the best products like donuts, coffee, and tortillas.”

Investment in Infrastructure and Talent

In addition to expanding its retail footprint, Foxtrot is investing the new capital in scaling its merchandising model and significantly increasing its engineering team, with plans to triple its size within the next year.

The company also intends to hire personnel in logistics, store payments, inventory management, personalization, and its Perks loyalty program.

Loyalty Program and Sales Growth

The Perks loyalty program has seen growth exceeding 110% in 2021.

Five-minute market pickup and cafe orders experienced substantial increases of 250% and 375%, respectively, during the same period.

Industry Recognition

Jared Stein, co-founder of Monogram Capital and a Foxtrot board member, described Foxtrot as a “category killing model” due to its success as an omnichannel brand and local product curator.

“Foxtrot is truly unique,” he added. “They developed their technology infrastructure from the ground up, and it’s rare to find a company with the same level of curation and partnerships with local brands. This is a key reason why people visit their stores. Others are attempting similar strategies, but often encounter complications. Foxtrot proactively addressed these challenges before scaling its operations.”