UK-listed retailer Wm Morrison Supermarkets has acquired about 10% of FreshDirect, a US-based online grocer, for £32m ($50m) in order to start building an internet operation.
In turn, FreshDirect will receive a minority economic interest in Morrison’s planned London online operation.
Dalton Philips, chief executive of Morrison, will join FreshDirect’s board and Morrisons will have a team in FreshDirect’s Long Island City, NY, facility to learn about its profitable e-commerce model.
Last month, Morrison bought internet retailer Kiddicare for £70m. Philips said: "What we learn from FreshDirect will be invaluable as we plan our own profitable e-commerce business for the UK."
Launched in 2002 with $100m in venture capital funding primarily from Peter Ackerman and after three years of trials, FreshDirect now has more than 600,000 customers in New York and parts of New Jersey, Connecticut, Westchester County and Nassau County.
FreshDirect subsequently raised in 2003 $31m from venture capital firms AIG, CIBC Capital Partners, Canyon Capital Partners and Mercantile Capital Partners.