As previously reported, to fund the expansion, Pink Dot obtained $20 million in financing from investors including Thomas Lee Internet Partners, GE Capital Group and William Blair. The 13-year-old company delivers made-to-order meals and supermarket products to customers' doors within 30 minutes.
By branching out beyond the Los Angeles-area, Pink Dot must now contend with some larger and more established Web grocers such as Webvan, HomeGrocer.com and Streamline.com. Moreover, Pink Dot is expanding at a time when investors have turned their backs on the online grocer industry.
Web supermarkets have seen their stocks plunge in recent months. Shares of Webvan and Peapod have fallen more than 60 percent, while HomeGrocer has dropped 40 percent.
Privately held Pink Dot said it has operated a profitable business for years. Pink Dot, which owns several brick-and-mortar stores in Los Angeles, began taking phone and fax orders in 1987.