By Agency Reporter

Thursday, 23 Dec 2010

NEW YORK: FreshDirect Incorporated, the New York-based online grocer, plans to raise as much as $200m to expand in Washington and Baltimore, according to two people with knowledge of the situation.

Bloomberg reported on Wednesday that FreshDirect was working with Deutsche Bank AG on raising funds, said one of the people, who declined to be identified as the plans were private. Scott Helfman, Deutsche Bank‘s spokesman, declined to comment. A FreshDirect representative said the company was not working with Deutsche Bank.

The grocer, led by Chief Executive Officer, Mr. Rick Braddock, currently operated in the five boroughs of New York and parts of New Jersey and Connecticut.

In July, Braddock told Bloomberg News that the grocer might pursue an initial public offering to help fund its expansion.

”FreshDirect has been experiencing over 20 per cent sales growth and will expand beyond the Tri-state” area, according to an e-mailed statement from the company. ”Baltimore and D.C. are among the target expansion markets. We do not comment on any fundraising details.”

The company, founded more than a decade ago by Joe Fedele and Jason Ackerman, raised $31m in 2003 in a private placement led by American International Group Incorporated sonsored investment funds with $15m.

The remaining $16m was funded by individual investors including CIBC Capital Partners, Canyon Partners and Mercantile Capital Partners LLC.

FreshDirect vies for customers with other Internet food retailers such as Peapod, acquired by Royal Ahold NV in 2001. United States grocery chains such as Kroger Company and Safeway Incorporated have faced increasing competition from discount retailers such as Wal-Mart Stores Incorporated and Target Corporation.

Source: Punch