Food delivery – be it ready-made restaurant orders, meal kits or groceries – has been one of the most used services in this past year of living in the cloud. global health pandemic, and today one of the companies with ambitions to build a pan-European empire in the third of those categories is announcing a major round of funding to help it get there.
Rohlik, a Czech start-up that has built an online grocery ordering and delivery business combining your usual grocery rates – which it buys wholesale itself or offers in concert with established businesses like Marks & Spencer – with items from local small businesses, took over 190 million euros ($ 230 million at current rates).
It plans to use the funding to expand its presence in the metropolitan areas of its three existing markets – the Czech Republic, Hungary and Austria – as well as to break into Germany, Poland, Romania and other countries. in a close future.
The company – which has some 17,000 items in its online store – saw its turnover increase by 101% in fiscal 2020 to 300 million euros out of 750,000 customers, and it is profitable. This cycle will give it a lot more fuel to grow than its balance sheet, Rohlik CEO and founder Tomáš Čupr told TechCrunch in an interview.
In a market now filled with businesses offering online grocery delivery, from online branches of established traditional sellers to ‘digital native’ brands, one of Rohlik’s unique selling points has been to tap into specific shopping habits of average European urban consumers, who regularly combine shopping in small businesses alongside supermarkets.
“We found the sweet spot of excellent service, namely a two hour delivery time ordered in 15 minute windows and an incredible assortment. Traditionally, you find supermarket assortments in online grocery stores, but what’s the point of waiting for that? We also have a supermarket, but we have married it with local butchers, fishmongers, bakers, fruit and vegetable vendors, things that you can’t buy in the mass market, ”Čupr said. “We save people 5-7 races, not just the supermarket one, and that’s why we have managed to evolve.”
The round was led by Partech with significant participation also from Index Ventures. The EBRD, Quadrille Capital, J&T Bank, R2G and Enern (a current investor) were also in the round.
The valuation is not being disclosed, but the Czech edition of Forbes, when reporting on the current cycle in January, said it was over € 600 million ($ 723 million). According to our sources, it’s about $ 600 million.
Founded in 2014, Rohlik’s funding comes at an interesting and key time in the online grocery industry, in Europe and beyond.
First, we as consumers have proven the immediate and sustained demand for these services over the past year.
Shelter-in-place orders and a general shift of a large portion of the consumer population to social distancing to help reduce the community spread of the Covid-19 pandemic have led to huge outbreaks of consumers using the ordering food products online for their grocery needs.
In many cases, this has resulted in overloading these systems. For example, Ocado here in the UK, where I am a customer, saw their system drop with demand, which led them to implement strict online queuing systems; many companies have been unable to meet inventory demands and time slot requests; etc.)
Even though some countries in Europe (almost not all) have released some of their orders, groceries has remained a popular online category in the markets where it is available. In other words, regardless of the growing trends that existed before a year ago, this adoption has accelerated and has remained stuck.
Second, online grocery delivery has become a key area of focus for investors, focusing specifically on startups, who see an opportunity to innovate even as some of the bigger players, such as Amazon. , beat partial withdrawals.
Last year we reported that Dija – a new start-up from former Deliveroo employees in London – was launching a round; Gorillas in Berlin raised $ 44 million in December; Ocado in the UK (which is listed here but is run like a startup) has raised over $ 1 billion.
Last month, Wolt in Finland – which started with restaurants but has since expanded into other areas, including groceries – raised $ 530 million; Glovo in Spain raised $ 120 million; and Weezy in the UK raised $ 20 million.
And just today, Crisp in the Netherlands, another online-only grocery delivery start-up, raised $ 36 million (€ 30 million) led by Target Global. (And this is not an exhaustive list.)
Depending on the country, target market (only urban or everyone, families or singles) and the choice of food delivered (e.g. those who want products that are slightly more prepared than fresh farm produce for the sake of effort larger baking, etc.) and sourcing relationships (directly with physical retailers, large or small, directly with producers), different startups are taking their own approaches around the kind of models they are building to manage the procurement, logistics and realization.
Some are preying on “dark” convenience stores in cities, as is the case with Gorillas; others use large distribution centers well outside urban centers, such as Ocado. Some are building their supply chains from scratch, while others are working with existing retailers large and small.
The appeal in part with Rohlik is the way he used logistics technology combined with in-depth market knowledge (one of Čupr’s previous startups was a restaurant delivery company, acquired by Delivery Hero) to build his platform. -form.
“We are making a substantial bet and we are not looking for any company that offers a substitute for existing services,” Index partner Jan Hammer said in an interview. “We have invested in different models around the world and we have good experiences with Good Eggs. As a technology investment firm, we are looking at trade payments, warehouse software, and related models that can be synergistic. The macro trend is universal offline migration to online migration through better business model. This is the direction of travel. As a VC we would also say that it also depends on the people involved.
Rohlik, Čupr said, uses large fulfillment sites that are not as large as field centers, but located much closer to where their clients are based. (It could also give the business an opportunity to expand into new cities: as large supermarkets become less profitable, they can present themselves as a real estate opportunity for online delivery companies like Rohlik.)
Interestingly, a company probably very similar to Rohlik, and therefore one of its potentially closest competitors, Picnic from the Netherlands, last raised funds in 2019, $ 300 million, to build a center. automated distribution system to serve its country of origin and Germany. It might be next in the list for a big round of cash. (I’ll also note that Index and Accel would both be interested in Gorillas, but neither invested in the end. With Index now placing its bets on Rohlik, you must be wondering what Accel might do next, if applicable.)
So far, many companies in this space have focused on domestic markets – Instacart has not grown outside of North America, Ocado is only in the UK, etc. The opportunity for a company like Rohlik is to export its model to more countries that have similar market dynamics to those it already serves.
“Rohlik is the most exciting player in the European online grocery industry,” Omri Benayoun, general partner of Partech, said in a statement. “We are honored to partner with Rohlik founder Tomáš Čupr, whose passion for service, sustainability and vision for the grocery industry we share. Rohlik’s execution expertise has earned him the trust of local traders and global FMCG companies; allowing Rohlik to outperform the grocery giants in quality and price. “
Update with more updated figures from Rohlik on its annual figures, and some changes in investor names in this cycle: Kaiser Permanente Ventures is not involved.