Dija, the London-based grocery delivery start-up, officially launches today and confirms that it raised £ 20million in seed funding in December – a round which we first announced will ‘it had been partially closed the previous month.
The backing of the company is Blossom Capital, Creandum and Index Ventures, with Dija apparently able to lift the pre-launch. In fact, there are already rumors swirling around the London venture capital community that the upstart may already be raising again – a figure of up to £ 100million has been put forward by a source – as the race to become the first European leader in the nascent “dark” “The grocery space is heating up.
Over the past few months, a slew of European startups have launched with promises to deliver groceries and other convenience store products within 10 to 15 minutes of ordering. They do this by building their own hyper-local, delivery-only distribution centers called “dark stores,” and recruiting their own delivery staff. This full-stack or vertical approach and the visibility it offers are then supposed to produce sufficient supply chain and logistics efficiency to run the unit’s economy, although this part is far from proven.
Earlier this week, Berlin-based Flink announced that it had raised $ 52 million in seed funding from a mix of equity and debt. The company didn’t break the split between equity and debt, although a source told me the equity component was about half and half.
Others in the space include Berlin’s Gorillas, London’s Jiffy and Weezy, and France’s Cajoo, all of which claim to focus on fresh food and groceries as well. There’s also the likes of Zapp, which is still stealthy and more focused on a potentially higher-margin convenience store with a similar offering to the American unicorn goPuff. Related: goPuff itself is also looking to expand in Europe and is currently in talks to acquire or invest in Britain’s Fancy, which some have dubbed a mini goPuff.
However, back to Dija. Founded by Alberto Menolascina and Yusuf Saban, both of whom spent several years at Deliveroo in managerial positions, the company has opened a boutique in central London and promises to allow you to order groceries and more. local products in 10 minutes. It has hubs in South Kensington, Fulham and Hackney, and says it plans to open 20 more hubs, covering central London and Zone 2, by the summer. Each hub carries around 2,000 products, claiming to be sold at “recommended retail prices”. A flat delivery charge of £ 1.99 is charged per order.
“The only competitors we’re focusing on are the big supermarket chains that dominate a $ 12 trillion global industry,” Dija’s Menolascina tells me when I ask about the competitors. “What really sets us apart from them, aside from our speed and technology, is our team, all of whom have experience in growing and disrupting this industry, including myself and Yusuf, who built and scaled Deliveroo from scratch ”.
Menolascina was previously director of corporate strategy and development at the takeout giant and held several positions previously. He also co-founded Everli (formerly Supermercato24), the Instacart-style grocery delivery company in Italy, and also worked at Just Eat. Saban is the former chief of staff to the CEO of Deliveroo and also worked for investment bank Morgan Stanley.
During the smooth launch of Dija, Menolascina said that typical customers do their weekly grocery store using the app and also cater for other needs, such as last minute emergencies or cravings. end of the night. “The problems that Dija helps solve are universal and we have designed Dija to be accessible to everyone,” he says. “That’s why we offer products at retail prices, available in 10 minutes, that combine value and convenience. Already, Dija is becoming a key service for parents who are pressed for time to work from home and home school, for example ”.
Despite the millions of dollars pumped into space, a number of VCs I’ve spoken to privately are skeptical about the possibility of running fresh groceries with near instant delivery. It is believed that fresh food perishes, margins are lower, and basket sizes will not be large enough to cover delivery costs.
“It could be the case for other companies, but almost everyone at Dija comes from this industry and knows exactly what they are doing, from buying and merchandising to data and marketing,” says Menolascina, in repulsive. “It should also be noted that we are a complete model, so we do not share our margin with other parties. In terms of the average basket size, it varies depending on the customer’s needs. On the one hand, we have customers who do all their groceries through Dija, while on the other hand, our customers depend on us for emergency purchases, for example diapers, batteries, etc. “
Regarding pricing, he says that like any retail business, Dija buys products at wholesale prices and sells them at recommended retail prices. “Going forward, we have a clear roadmap for how we generate additional revenue, including strategic partnerships, supply chain optimization and technology improvements,” adds Menolascina.
Meanwhile, TechCrunch learned that prior to launching his own app, Dija had conducted a number of experiments in the Deliveroo takeout market, including selling various convenience store items, such as potato chips and pharmaceuticals. on sale. If you have ever ordered toiletries from “Baby & Me Pharmacy” or bought chocolate candies from “Valentine’s Vows”, you have probably and without knowing it bought from Dija. These brands, and several others, all ship from the same address in South Kensington.
“Going straight to the consumer without properly testing the pick & pack is a big risk,” Menolascina told me in a WhatsApp message a few weeks ago, confirming the Deliveroo tests. “We created disposable virtual brands just to learn what to sell and how to restock, pick and pack and deliver.”