US online grocery firm Shipt has raised $20.1m in venture capital funding to expand its business to new markets.

Greycroft Partners, Harbert Growth Partners and e.ventures particpated in the Series A funding round.

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Shipt will also use the funding to develop further partnerships with grocery retailers and invest in its team.

Additionally ,the company intends to add alcohol delivery to its platform later this year.

The company was originally launched in its hometown of Birmingham, Alabama, in 2014. It has since then expanded to 27 cities across ten states, serving more than 5,000 shoppers.

Including the prior seed funding, Shipt has now raised a total of $25.3m in venture capital.

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Shipt founder and CEO Bill Smith said: “Over the past year, we have laid a strong foundation for our business and scaled our service across the country. This funding is the catalyst that will propel us to the next level.

“We are ready to put this funding to work strategically, so we can cultivate new partnerships and continue building the best way to buy groceries.”

“We are ready to put this funding to work strategically, so we can cultivate new partnerships and continue building the best way to buy groceries.”

Shipt delivers groceries from local grocery stores via a community of shoppers and its app. The company charges customers $99 a year for unlimited grocery deliveries on all orders more than $35.

Through its app, a user gets to choose their preferred retailer, browse through a range of grocery items before finalising on a convenient one-hour window for same-day delivery.

Customers also have an option to pay a monthly charge of $14 to get unlimited deliveries while there is a $7 delivery charge for orders less than $35.

Image: Shipt delivers groceries from local grocery stores through a community of shoppers and an app. Photo: courtesy of Shipt.