On-demand grocery delivery, which really became a reality with the emergence of the Covid-19 pandemic, continues to attract a lot of attention from investors. The jury is still out on how people will use those services in the long term, but in the meantime, the most ambitious of startups in the field are on the rise in a big way.
In the latest development, Flink, a Berlin-based “instant” on-demand grocery delivery service built around self-contained dark stores and a smaller assortment (2,400 items) that it says will deliver in 10 minutes or less, has raised $ 240 million to expand its business to more cities and more countries, following strong demand.
Flink, which means “fast” in German, is currently active in 24 cities in Germany, France and the Netherlands. It hasn’t disclosed how many active customers it has, but it is targeting younger consumers, those with small refrigerators, those who have forgotten items in their larger stores, and people who simply don’t want or can’t shop at older stores. . -style once every one to two weeks. Flink says it is currently in a rhythm of activating operations in a new area every other day, he said.
“We are on a mission to give people back some of their precious time during their hectic days and impress them with our service every time they order,” said Flink CEO Oliver Merkel, who co-founded the company with Julian Dames and Christoph Cordes. . in a sentence. “We want to establish Flink as the premier destination for your everyday products at great prices and instant delivery by our incredible passengers. The order growth we have seen in recent weeks has been explosive and we attribute it to the excellent service we provide to our consumers. ”
The size of this all-stock Series A is extraordinary considering that the company was launched in December of last year. The company is not disclosing its valuation, but a person close to the company said it is “not a unicorn yet.” (That is, it is not worth $ 1 billion on paper.)
The round is co-directed by Prosus, BOND and Mubadala Capital; and it comes with a very interesting deal attached.
REWE, a German supermarket giant, has signed a strategic partnership with the company that will make Flink its preferred partner for smaller purchases, which appears to complement the work that REWE is doing to build its own grocery delivery businesses for larger baskets. . It is unclear if REWE is actually investing.
This latest investment comes on the heels of Flink announcing, in March, when he was just three months old, a $ 52 million round from Target Global and previous sponsors Northzone, Cherry Ventures and TriplePoint Capital, along with Cristina Stenbeck of Kinnevik, who invested in a personal capacity.
The opportunity for a new startup to enter the food delivery market, and in this case specifically grocery, is interesting right now.
For one thing, we’ve been through a year where many cities in Europe have been under shelter-in-place claims, leading many more people to turn to online food ordering to get essential items delivered to their doorsteps.
In other words, the demand, at least in the current circumstances, is more than proven. In fact, many of the major vendors completely gave in under pressure with crashed sites, little or no delivery space available, and many items out of stock too often.
On the other hand, that situation has led to a great profusion of companies that pounce to fill that void. Perhaps too great a profusion?
Apparently there are dozens of new players competing with Flink. Gorillas, another group from Berlin, has also been raising a lot of money and has boasted of its own valuation of over a billion dollars (for what it’s worth: remember, this is all on paper only). Alongside the new entrants from last year, there is also a flood of more mature startups like Glovo (which raised $ 528 million earlier this year), Kolonial ($ 265 million earlier this year), Everli, and Rohlik (respectively. , $ 100 million and $ 230 million in rounds this year). spring), as well as much bigger players like Ocado and, of course, grocery stores that are investing heavily in their own operations.
And just earlier this morning, Turkey’s Getir, another grocery startup that has been investing heavily in growth (their delivery bikes can be seen every time I go out right now here in London) announced a $ 550 million round in a Valuation of 7.500 million dollars: a news that can It is fast and easy). The largest of them then moved on to land grabs to pick up others close to them for better economies of scale, a process that ultimately led to the most capitalized of that smaller subset globally. The bigger global players then either gobble up the smaller ones or merge to take on each other.
In reality, all of that is still unfolding and indeed some of the larger hot food delivery companies, such as Deliveroo in the UK, are also moving into supermarkets to better diversify.
In that sense, it is very interesting to see Prosus in this round.
Prosus, which is essentially a tech giant that spun off from the rest of Naspers some time ago as a separate, publicly traded entity to better focus investment and attention on the space (it has a large stake in Tencent, among other things ) – actually burned out last year from its longstanding and hostile attempt to acquire Just Eat, to combine it with Prosus’s existing holdings in food delivery.
One of the world’s largest takeout delivery players, Just Eat eloped with Takeaway and sailed into the Grubhub sunset, leaving Prosus floating in the water.
Since then, Prosus has been very proactive in using his capital to chart his own course. That includes holdings in Swiggy in India, the investment in that round from Kolonial, and also today’s news backing up Flink.
“The opportunity that exists for online grocery delivery is huge, and the grocery market in Germany alone is expected to reach more than 300 billion euros in the next few years,” said Larry Illg, CEO of Food Delivery at Prosus , it’s a statement. “Last year, many new players entered the nascent market, competing to meet growing consumer demands. Flink goes to market by offering ultra-fast delivery of items, mostly in less than 10 minutes, so consumers get what they need almost immediately. Flink’s innovative technology-enabled logistics service, combined with the expertise of the team, the quality of the partnerships they have quickly established and the pace of execution within Germany, has been nothing short of impressive. ”
“Flink is pioneering a new business model designed specifically for consumers who expect better, faster and cheaper services,” added Daegwon Chae, general partner at BOND. “We have been impressed by Flink’s ability to scale quickly while delighting customers through a seamless experience, and we are excited to partner as Flink builds the grocery store of the future.”
“Flink is the rare combination of a great founding team tackling a huge market with a truly disruptive proposition. The grocery retail market in Germany is one of the largest non-digitized markets with only 3% penetration online. We believe the grocery store of the future will be hyperlocal, instantly available and always delighting your customers. With best-in-class operations and strong momentum, Flink can become a major player in the digital food industry, and we look forward to partnering with them on the journey, ”said Amer Alaily of Mubadala Capital, in a statement.