RelayFoods lands $3 million in fresh capital

A startup grocery delivery service has scored a new round of investment funding., which has operations in Richmond and Charlottesville, said Tuesday that it closed a $3 million funding round from Battery Ventures and a group of other undisclosed investors.

RelayFoods has raised $5.5 million since its founding in 2007.

Customers order groceries from local merchants online and pick them up at specified delivery spots. The company will deliver to customers’ homes for an extra fee.

RelayFoods started in Charlottesville two years ago and expanded to Richmond in August 2010.

The company said it would use the capital to expand its product offerings and fine-tune its operations.

President and COO Arnie Katz wouldn’t get too specific about the company’s plans for the money.

“We raised the money because of how well we’ve grown over the past year and half since we started serving Richmond,” Katz said.

RelayFoods has 35 pickup locations in Richmond, in addition to 25 in Charlottesville. It has about 20 employees in Richmond and a 9,000-square-foot warehouse in Scott’s Addition.

Its vision expands beyond Central Virginia, though.

“Relay is a business that has regional and national aspirations,” Katz said. “A huge opportunity exists in the online grocery space in that there is not yet a clear leader that is emerging.”

Katz said there is no set timetable, and he wouldn’t mention any specific markets the company is targeting.

“We’re getting closer every month,” he said.

This latest round of capital should last Relay a while, Katz said.

“That said, when we start expanding aggressively, it probably would make sense to put additional capital into play.”

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