Who will win the fast grocery delivery startup race?
The race to bigger billion-dollar valuations for speedy grocery delivery startups hots up as Gorillas, Flink and Getir draw ever-bigger investments and valuations in a move to scale and expand internationally.
Investment in speedy grocery delivery startups hots up
It seems venture capitalists can’t get enough of fast grocery delivery startups, whose apps promise delivery of on-demand groceries in just 10 minutes (or 15, in the case of Weezy), with Mubadala Capital, Coatue, Tencent, BOND, Sequoia Capital, Tiger Global, Silver Lake, SoftBank and Creandum among the well-known funds getting in on the fast grocery delivery action.
In fact, venture-backed grocery delivery firms have raised around US$1.56bn in Europe this year to date, more than doubling the investment into these startups throughout the whole of 2020.
Pioneering the sector, Getir, which launched in 2015 in Istanbul, has just raised US$550m in funding giving it a whopping US$7.5bn, tripling its previous valuation of US$2.6bn, bringing its total raised just since the start of the year to US$1bn.
Berlin-based Flink (which means ‘quick’ in German) has just secured US$240m from investors, though hasn’t yet hit unicorn status; and Berlin-based speedy delivery startup Gorillas, which achieved unicorn status (US$1bn) following investment in March, just 10 months after launching, making it Europe’s fastest unicorn, is seeking a further investment round to bring its valuation to US$6bn, according to Bloomberg.
A pandemic phenomenon
Driven in no small part by the pandemic, the now highly competitive speedy grocery delivery phenomenon grew in line with the huge demand for online shopping during lockdown.
In fact, many of them launched during the pandemic, tapping into the fact that people couldn’t leave home, including Berlin-based speedy grocery delivery apps Gorillas (March 2020), Flink (December 2020), Weezy (summer 2020) and Dija (March 2021).
These services, namely apps, which promise groceries shipped to customers’ doors, from cart to doorstep, in just 10-15 minutes, have transformed how people buy groceries, edging out the supermarkets and transforming the food supply chain, with customers paying the same price as going to the store themselves.
The goal is simple, according to the CEO and founder of Gorillas, Kagan Sumer, “to change the game in the grocery retail market, which has been slow to implement new and speedier technological solutions”.
Getir and Gorillas to enter the US
All European-based startups, Getir, Gorillas, Dija and Flink have all expanded beyond their home countries, but only within Europe to date, with four of the five now in London, for example, and with recent investments being used by all to fund further expansion into European cities.
Flink, which is currently active in 24 cities across Germany, France and the Netherlands, is planning to use its latest investment to expand into more cities, and more countries; while London-based Dija recently expanded to France and Spain (Montmartre, Le Marais, Madrid).
However, both Getir and Gorillas have plans to utilise recent funding to enter the US. Getir – which currently serves 25 cities in Turkey and recently launched in Amsterdam and London – is planning to not just expand across the UK and in Paris and Berlin, but to begin operations in several US cities by the end of the year. While Gorillas, which now has operations in 25+ cities across Germany, the Netherlands, France and the UK, has announced its entry to New York.
Such global expansion would create greater competition for the more mature players, the food delivery behemoths (who don’t necessarily claim to be ‘fast’) such as Instacart, Glovo, Kolonial, Everli, Rohlik, as well as Uber and DoorDash, both of which have recently expanded into grocery deliveries.
How do these startups operate?
Known as ‘dark store startups’, the services are built around self-operated dark stores, which carry a select assortment of items, operating fulfilment centres which carry out online orders rather than serve customers in person and so have significantly smaller operating costs than high-street supermarkets and require fewer people to run them.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.