Glovo bags two grocery picking and delivery startups

More startup swapping in the food delivery space: Spain’s Glovo, an on-demand delivery platform which operates a network of dark stores focused on urban convenience shopping, is pushing deeper into planned grocery shopping — announcing the acquisition of two regional ‘Instacart-style’ grocery picking and delivery startups, Madrid-based Lola Market and Portugal’s Mercadão.

Terms of the acquisitions are not being disclosed.

2015-founded Lola Market had raised around €3M, per Crunchbase. It’s not clear how much Portugal’s Mercadão — which was founded in 2018 — had raised over its shorter run.

Glovo, meanwhile, raised a meaty $528M Series F back in April — but quickly splurged $208M to pick up three food delivery brands from rival Delivery Hero in Central and Eastern Europe.

The Spanish on-demand delivery platform is facing challenges to its model on home turf where the government has applied a labor reform aimed at delivery workers in the gig economy.

The reform, agreed earlier this year, came into application last month — recognizing delivery platform riders as employees, or at least on paper.

Glovo responded by imposing a new self-employment model on the vast majority of riders on its platform, hiring only around a fifth. So the scene looks set for legal challenges in its home market.

At the European Union level, lawmakers are also eyeing how to improve conditions for platform workers — and could come with pan-EU legislation that has wider implications for the business models of regional players like Glovo.

Ongoing regulatory challenges over employment classification and algorithmic management of workers in the gig economy may offer some context for Glovo’s expanding interest in grocery purchasing in Europe, where it has been building out a network of dark stores to power what it calls ‘Q-commerce’ (aka, quick urban convenience shopping).

As well as for its recently announced international expansion in Africa, where it has said it will be doubling down investment over the next 12 months.

But also the challenge of hitting profitability for pure on-demand food delivery looks like a sizeable piece of the puzzle here driving consolidation.

By adding players in the supermarket and retail outlet picking delivery space, Glovo expands its coverage of shoppers’ needs — and can nudge users to spend more by being able to cross-sell them on planned purchases (such as the weekly grocery shop), as well as what it bills as “emergency essentials” and “fast action convenience” powered by the more limited inventory it can offer in its city center dark stores.

Both Lola Market and Mercadão’s brand identities will be retained, per Glovo, which also says they will operate independently — led by Gonçalo Soares da Costa, CEO of Mercadão.

It touts the acquisitions as strengthening its competitive position in Europe in “key markets” — going on to suggest it will add grocery picking and delivery across its entire market footprint, with an initial expansion planned for Poland and Italy.

Also today it said its Q-Commerce division is “on track” to reach an annual Gross Transaction Value (GTV) of more than €300M this year — adding that it expects that to more than triple by the end of 2022, projecting it will surpass a run rate of €1BN.

Commenting on its latest acquisitions in a statement, Oscar Pierre, CEO and co-founder of Glovo, added: “We see huge potential in the on-demand groceries marketplace and both companies are strong local players in their respective markets, and further strengthen our Q-Commerce offering.

“With Lola Market and Mercadão on board, we can build stronger partnerships with retailers, offer our users big-basket purchases and provide a more complete service. These acquisitions represent a significant step forward for us, as we’re now able to cover all of the main purchasing considerations for groceries customers, making Glovo a one-stop-shop for e-groceries.”

#apps, #delivery-hero, #delivery-startups, #e-groceries, #europe, #food, #food-delivery, #glovo, #grocery-store, #instacart, #madrid, #online-food-ordering, #oscar-pierre, #portugal, #spain

GrubMarket gobbles up $120M at a $1B+ pre-money valuation to take on the grocery supply chain

When people talk about “online food delivery” services, chances are that they’ll think of the Uber Eats, Instacarts and Getirs of this world. But today a startup that’s tackling a different aspect of the market — addressing the supply chain that subsequently turns the wheels of the bigger food distribution machine — is announcing a big round of funding as it continues to grow.

GrubMarket, which provides software and services that help link up and manage relationships between food suppliers and their customers — which can include wholesalers and other distributors, markets and supermarkets, delivery startups, restaurants, and consumers — has picked up $120 million in a Series E round of funding.

The funding is coming from a wide mix of investors. Liberty Street Funds, Walleye Capital, Japan Post Capital, Joseph Stone Capital, Pegasus Tech Ventures, Tech Pioneers Fund are among the new backers, who are being joined by existing investors Celtic House Asia Partners, INP Capital, Reimagined Ventures, Moringa Capital Management, and others, along with other unnamed participants

Mike Xu, GrubMarket’s founder and CEO (pictured, above), tells me that the company is currently profitable in a big way. It’s now at a $1 billion annualized run-rate, having grown revenues 300% over last year, with some markets like New York growing even more (it went from less than $10 million ARR to $100 million+).

With operations currently in Arizona, California, Connecticut, Georgia, Michigan, New York, New Jersey, Missouri, Massachusetts, Oregon, Pennsylvania, Texas, and Washington, and some 40 warehouses nationwide. GrubMarket had a pre-money valuation of over $1 billion, and now it will be looking to grow even more, both in terms of territory and in terms of tech, moving ahead in a market that is largely absent from competitors.

“We are still the first mover in this space,” Xu said when I asked him in an interview about rivals. “No one else is doing consolidation on the supply chain side as we are. We are trying to consolidate the American food supply chain through software technologies, while also trying to find the best solutions in this space.”

(And for some context, the $1 billion+ valuation is more than double GrubMarket’s valuation in October 2020, when it raised $60 million at a $500 million post-money valuation.)

Longer term, the plan will be to look at an IPO provisionally filing the paperwork by summer 2022, Xu added.

GrubMarket got its start several years ago as one of many companies looking to provide a more efficient farm-to-table service. Tapping into a growing consumer interest in higher quality, and more traceable food, it saw an opportunity to build a platform to link up producers to the consumers, restaurants and grocery stores that were buying their products. (Grocery stores, incidentally, might be independent operations, or something much bigger: one of GrubMarket’s biggest customers is Whole Foods, which uses GrubMarket for produce supply in certain regions of the U.S. It is currently is the company’s biggest customer.)

As we wrote last year, GrubMarket — like many other grocery delivery services — found that the pandemic initially provided a big fillip, and a big rush of demand, from that consumer side of the business, as more people turned to internet-based ordering and delivery services to offset the fact that many stores were closed, or they simply wanted to curtail the amount of shopping they were doing in-person to slow the spread of Covid-19.

But fast forward to today, while the startup still serves consumers, this is currently not the primary part of its business. Instead, it’s B2B2C, serving companies that in turn serve consumers. Xu says that overall, demand from consumers has dropped off considerably compared to a year ago.

“We think that restaurant re-openings have meant more people are dining out again and spending less time at home,” Xu said, ” and also they can go back to physical grocery stores, so they are not as interested as they were before in buying raw ingredients online. I don’t want to offend other food tech companies, but I think many of them will be seeing the same. I think B2C is really going to slow down going forward.”

The opening for GrubMarket has been not just positioning itself as a middleman between producers and buyers, but to do so by way of technology and consolidating what has been a very regionalized and fragmented market up to now.

GrubMarket has snapped up no less than 40 companies in the last three years. While some of these have been to help it expand geographically (it made 10 acquisitions in the Los Angeles area alone), many have also been made to double down on technology.

These have included the likes of Farmigo, once a Disrupt Battlefield contender that pivoted into becoming a software provider to CSAs (an area that GrubMarket sees a lot of opportunity), as well as software to help farms manage their business staffing, insurance and more: Pacific Farm Management is an example of the latter.

GrubMarket’s own in-house software, WholesaleWare, a cloud-based service for farmers and other food producers, saw its sales grow 3,500% over the last year, and it is now managing more than $4 billion in wholesale and retail activity across the U.S. and Canada.

There will be obvious ways to extend what GrubHub does deeper into the needs of its customers on the purchasing end, but this is in many ways also a very crowded market. (And not just crowded, but crowded with big companies. Just today, Toast, the company that builds software for restaurants, filed for a $717 million IPO at potentially a $16.5 billion valuation.) So instead, GrubHub will continue to focus on what has been a more overlooked aspect, that of the suppliers.

“I am focused on the food supply chain,” Xu said. “Operators in the food supply chain business most of the time don’t have any access to software and e-commerce technology. But we are not just a lightweight online ordering system. We do a lot of heavyweight lifting around inventory management, pricing and customer relations, and even HR management for wholesales and distributors.” That will also mean, longer term, that GrubMarket will likely also start to explore connected hardware to help those customers, too: robotics for picking and moving items are on that agenda, Xu said.

“GrubMarket has built a profitable, high-growth business underpinned by its best-in-class technology platform that’s reinventing how businesses access healthy, fresh foods,” said Jack Litowitz, director of strategic investments at Reimagined Ventures, in a statement. “We’re proud to support GrubMarket as it continues to expand into new regions and grow its WholesaleWare 2.0 software platform. At Reimagined Ventures, we always seek to invest in businesses that are disrupting inefficient industries in innovative ways. Mike Xu and the GrubMarket team have built one of these businesses. We’re excited to back their vision and work in making the food supply chain more efficient.”

“GrubMarket is transforming the trillion-dollar food distribution industry with unprecedented speed by implementing advanced digital solutions and operational discipline. The company’s scale, growth, and profitability are extraordinarily impressive. Pegasus is delighted and honored to be part of GrubMarket’s exciting journey ahead,” added Bill Reichert, partner at Pegasus Tech Ventures.

#arizona, #california, #canada, #ceo, #connecticut, #digital-solutions, #farmigo, #food, #food-delivery, #food-supply-chain, #funding, #georgia, #grocery-store, #grubhub, #grubmarket, #instacart, #japan-post-capital, #los-angeles, #massachusetts, #michigan, #mike-xu, #missouri, #new-jersey, #new-york, #olo, #online-food-delivery, #online-food-ordering, #oregon, #partner, #pegasus-tech-ventures, #pennsylvania, #reimagined-ventures, #retailers, #software, #software-platform, #supply-chain, #texas, #uber-eats, #united-states, #washington, #whole-foods

Owner.com serves up $10.7M so that independent restaurants can get cooking

Independent restaurants don’t typically have the luxury to create their own online food ordering and delivery capabilities or negotiate for lower rates from legacy ordering platforms like the large restaurant chains do.

Here’s where Owner.com comes in. The Beverly Hills-based company provides a free online ordering, delivery and marketing platform for independent restaurants that puts them on similar playing fields with the big guys. And unlike the legacy food delivery services, Owner.com restaurants own their customer data and can automate marketing campaigns.

Adam Guild is the company’s 21-year-old co-founder and CEO, a high school dropout and a Thiel Fellow, who originally started by assisting his mother’s dog grooming business that was having difficulties attracting customers. After stepping in with some online marketing methods, her business grew, and later expanded into multiple locations. Guild then wanted to work with a bigger group of people and stumbled across restaurants while helping some clients create online landing pages.

With consumer demand shifting to primarily online ordering and delivery over the past 18 months, online ordering revenue is expected to double from $248 billion in 2020 to $449 billion by 2025. Ordering platforms like Doordash, Uber Eats and Grubhub control 80% of orders and typically charge between 20% and 30% per order to restaurants and additional fees to consumers.

In contrast, Owner.com is free for restaurants and charges customers a flat $4 fee when they order from the website. Guild explained that larger restaurant chains have the buying power to negotiate lower rates, while independent restaurants do not. With the inability to keep up, some 110,000 restaurants in the U.S. closed in 2020.

Guild initially bootstrapped his company, working with large restaurant chains, like P.F. Chang’s, drive online orders. Then the global pandemic hit. He ended up losing all of his revenue and had to let all of his employees go but one. To add to his bad luck, he was then rejected from Y Combinator and other accelerator programs.

“For the first three days, I was depressed,” Guild told TechCrunch. “I had spent two years building a company and now it was dead. In the same way we were disrupted, I began to think there was no better position to be in than a scrappy startup. I didn’t know what the next business would look like, so I started cold-calling restaurant owners, asking how I can be helpful and what type of technology they were looking for. Many of them told me that online ordering sucked, but if they didn’t solve it soon, they would go out of business.”

One pivot and a year later with co-founder Dean Bloembergen, Owner.com closed on $10.7 million in seed funding led by SaaStr Fund, with participation from Redpoint Ventures and Day One Ventures, as well as a group of individual investors including Naval Ravikant, CNBC’s The Profit host Marcus Lemonis, The Kitchen Restaurant Group’s Kimbal Musk, DoNotPay founder Joshua Browder, Figma founder Dylan Field, The Chainsmokers and independent restaurant owners and customers of Owner.com.

Jason Lemkin, founder of SaaStr Fund, said restaurant SaaS was a space in which his firm was interested in investing, but thought it was a bit boring — there were already quite a few vendors in the space, like Toast and Grubhub, and most were just technology solutions. However, when he heard that Owner.com was a break-out company from the monotony, he said he had to take a look.

“The ability to own the customer relationship is that ultimate differentiation,” Lemkin said. “Their ultimate goal is to provide a robust technology platform to increase margins, have people order more and come back often.”

Meanwhile, Guild intends to use the new funding to continue product development and add new features like landing pages, the ability to make reservations and native apps for white-label service.

Since the launch last year, the company has reached a seven-figure run-rate and over 105% monthly revenue retention across over 700 restaurant locations, Guild said. To date, Owner.com has transacted over $18 million and helped its restaurant customers avoid paying $3 million to online order platform fees annually.

“It’s all about empowering the 40% of the restaurant industry that is run by people who started off in entry-level positions, and over the years, worked their way up to own the ‘American Dream,’ ” he added.

 

#adam-guild, #advertising-tech, #day-one-ventures, #dean-bloembergen, #ecommerce, #enterprise, #food-delivery, #funding, #jason-lemkin, #online-food-ordering, #owner-com, #recent-funding, #redpoint-ventures, #saastr-fund, #startups, #tc, #the-chainsmokers

Europe’s quick-commerce startups are overhyped: Lessons from China

More than 10 companies currently compete across Europe with an instant grocery delivery business model. Half of them were established in 2020, the year of the pandemic. These companies have raised more than $2 billion to date.

Existing and well-funded online food-delivery service players like Delivery Hero are also joining the race by launching dedicated grocery offerings. However, if lessons from the world’s largest online grocery market, China ($400 billion), matter, then it’s clear that instant delivery is not the magic bullet to crack the dominance of Europe’s incumbent supermarket chains in the overall $2 trillion-plus flat market.

Instead, China’s quick-commerce equivalents (like Dingdong Maicai, Miss Fresh and Meituan Maicai) compete alongside a wealth of other online grocery models (such as Pinduoduo, JD’s Super and Alibaba’s Taoxianda), which have helped bring total market penetration to 20% and beyond.

Quick commerce suffers from narrower profit margins compared to competing models and is addressing lower consumer demand in China than anyone in the West is expecting it to achieve in Europe and the U.S. If the performance of online grocery platforms in China (a market five to seven years ahead of Europe in terms of online retail) is anything to go by, a range of B2C business models would be more likely to displace the traditional grocery retailers.

Third-time luck for quick commerce?

The idea of ordering groceries online and having them delivered to consumers in less than an hour is nothing new. Back in the heyday of the dot-com bubble, a company attempted to do just that: Kozmo.com. Founded in 1998, it raised more than $250 million (around $400 million in today’s dollars) from investors, promising to deliver food, among other items, to consumers within an hour, while charging no delivery fees.

In 1999, it had revenues of $3.5 million and a loss of $1.8 million. However, in 2001, the business was shut down by its board after the company could not make the business model work at scale.

Some 15 years later, another company had a go. Gopuff was established in Philadelphia in 2013 and originally targeted students. What started out as a hookah delivery service soon expanded into a much broader convenience store offering and delivered to customers in approximately 30 minutes.

Gopuff was most recently valued at $15 billion after raising a total of $3.4 billion — 75% of which occurred in the past 12 months. Last year, Gopuff grew revenues from around $100 million to $340 million.

Kozmo.com went out of business after just three years. Meanwhile, Gopuff was turned down by several VCs in its early days, and it wasn’t until the pandemic that it saw a rapid acceleration in fundraising. Little did teams at either company know that they would later become the inspiration for a whole generation of founders in Europe.

Europe’s $2B instant-grocery gamble

Has anything fundamentally changed in the 20 years since Kozmo.com? Indeed, we’ve seen little technological progress that would hugely affect the operations of an instant commerce business. However, there have been much larger shifts in consumer habits.

Firstly, the number of global internet users has skyrocketed (from below 500 million to beyond 4 billion), and mobile internet has taken over. Secondly, demand for online grocery delivery has grown significantly due to the COVID-19 pandemic, as consumers have preferred to make retail purchases from home for safety reasons. Thirdly, consumers are now accustomed to paying fees for delivery services, typically around $2 per order, which Kozmo notoriously did not do.

While many online grocery business models exist, the instant grocery, quick-commerce approach has been the favorite of European entrepreneurs and VCs over the past 18 months. The model itself, also referred to as q-commerce, is not that hard to understand.

Companies maintain a small product offering of around 1,000–2,000 SKUs that consumers would otherwise find in convenience or drug stores. These products are purchased directly from brands or through distributors and are stored in self-operated microwarehouses close to customers’ locations.

Marketing tactics are aggressive, often employing vouchers for first-time users of up to $12 (50% of an average shopping basket), and many startups offer their products at supermarket price or even at a discount of 10%–15%. Delivery usually happens by bicycle, e-bike or scooter, within 10-30 minutes of an order being placed, for a fee of around $2 with no minimum order value.

Companies like Getir from Istanbul (total funding: $1 billion, last valuation: $7.5 billion) and Gorillas from Berlin (total funding: $335 million, last valuation: $1 billion) are leading the way. When Gorillas announced its $290 million Series B in March 2021, it became the fastest European startup to achieve unicorn status (nine months after launch). The company is already rumored to be seeking Series C financing at a $2.5 billion valuation.

There are more than 10 companies across Europe with more or less the same business model. Those include the 2020-established Flink (Germany-based, $300 million raised), Zapp (U.K.-based, $100 million raised), Dija (U.K.-based, $20 million raised and just acquired by Gopuff), Jiffy (U.K.-based, $7 million raised) and Cajoo (France-based, $6 million raised).

There is also JOKR, which was started by the founder of Foodpanda. JOKR was only established in Q1 2021, but right after incorporation raised one of the largest ever initial seed rounds (rumored to be $100 million) and subsequently a $170 million Series A in July to bring the model to Europe, Latin America and the U.S.

Likewise, companies coming from food delivery have pushed further into this space and received additional funding in recent months, notably Delivery Hero through Dmart and Glovo through SuperGlovo, following role models in the U.S., such as DoorDash.

Does instant grocery stand a chance of becoming profitable?

As these companies approach later-stage financing sometime in the future, questions will be asked about the path to profitability in an industry of notoriously thin margins. Indeed, this is an uncomfortable truth that hasn’t changed since the early days of Kozmo.com.

The available figures show that old patterns are repeating. Gopuff recently reported an EBITDA of negative $150 million on $340 million in revenue (EBITDA margin: -45%). Furthermore, an analysis by the German business monthly Manager Magazine concluded that Gorillas was operating at negative unit economics of -6%. Additional costs, such as overhead and technology, might push this number up significantly further.

#alibaba, #amazon, #asia, #carrefour, #china, #column, #covid-19, #delivery-hero, #e-commerce, #ec-china, #ec-ecommerce-and-d2c, #ec-europe, #ecommerce, #europe, #food-delivery, #gopuff, #meituan, #ocado, #online-food-ordering, #online-grocery, #pinduoduo, #tc

Forward Kitchens cooks up $2.5M to transform existing kitchens into digital storefronts

Forward Kitchens was working quietly on its digital storefront for restaurants and is now announcing a $2.5 million seed round.

Raghav Poddar started the company two years ago and was part of the Y Combinator Summer 2019 cohort. Poddar told TechCrunch he has been a foodie his entire life. Lately, he was relying on food delivery and pickup services, and while visiting with some of the restaurant owners, he realized a few things: first, not many had a good online presence, and second, these restaurants had the ability to cook cuisine representative of their communities.

That led to the idea of Forward Kitchens, which provides a turnkey tool for restaurants to set up an online presence, including food delivery, where they can create multiple digital storefronts easily and without having to contact each delivery platform. The company ran pilot programs in a handful of restaurants, and this is the first year coming out of stealth.

“It’s an expansion of what they have on the menu, but is not immediately available in the neighborhood,” Poddar added. “Kitchens can keep the costs and headcount the same, but be able to service the demand and get more orders because it is fulfilling a need for the neighborhood, which is why we can grow so fast.”

Here’s how it works: Forward Kitchens goes into a restaurant and takes into account its capacity for additional cooking and the demographic area, as well as what food is available near it, and helps the restaurant create the storefront.

Each restaurant is able to build multiple storefronts, for example, an Italian restaurant setting up a storefront just to sell its popular mac n’ cheese or other small plates on demand. A couple hundred digital storefronts were already created, Poddar said.

A group of investors, including Y Combinator, Floodgate, Slow Ventures and SV Angel and angel investors Michael Seibel of YC, Ram Shriram and Thumbtack’s Jonathan Swanson, were involved in the round.

The new funding will be used to expand the company’s footprint and reach, and to hire a team in operations, sales and engineering to help support the product.

“Forward Kitchens is empowering independent kitchens to create digital storefronts and receive more online sales,” Seibel said via email. “With Forward Kitchens, a kitchen can create world-class digital storefronts at the click of a button.”

#ecommerce, #enterprise, #floodgate, #food, #food-and-drink, #food-delivery, #forward-kitchens, #funding, #jonathan-swanson, #kitchen, #michael-seibel, #online-food-ordering, #raghav-poddar, #recent-funding, #restaurant, #slow-ventures, #startups, #storefront, #sv-angel, #tc, #y-combinator

Orchata raises $4M, aims to build a ‘Gopuff for Latin America’

Luis Mario Garcia grew up in Mexico making deliveries for the grocery stores in his neighborhood. After honing his startup skills in San Francisco, he returned to Mexico with the idea of building a software company.

That’s when he met his co-founder Javier Gonzalez and the pair started Orchata in 2020, a mobile app enabling consumers to get groceries delivered in 15 minutes, with no substitutes and at supermarket prices. Products delivered include fresh fruit, beverages, bread, medicine and household essentials, Garcia told TechCrunch.

Orchata does this by operating a network of micro fulfillment centers — it is already operating in two cities — with technology for efficient picking and hyperfast delivery.

Online food delivery sales in Latin America are projected to reach $9.8 billion by 2024, with the global pandemic driving demand for faster delivery, according to Statista. Garcia sees three different waves in this market: the first one being traditional supermarkets, where you can spend hours, which led to the second wave of food delivery companies, including some big players in the region — for example Rappi in Colombia, which in July raised $500 million in Series F funding at a $5.25 billion valuation in a round led by T. Rowe Price, and Cornershop in Chile, which was acquired by Uber in 2019.

However, Garcia said many of these services still take more than an hour from order to doorstep and may require phone calls if an item is not available. He wants to be part of a third wave — software that is integrated with inventory and delivery that is super fast, and no substitutions.

“This is similar to what is going on around the world, but there is a huge opportunity to bring convenience, to be the Gopuff for Latin America, and we want to build it first in the region,” Garcia said.

The Monterrey-based company was part of Y Combinator’s summer 2020 cohort and on Friday announced a $4 million seed round from a group of investors, including Y Combinator, JAM Fund, FJ Labs, Venture Friends, Investo and Foundation Capital, and angel investors Ross Lipson, Mike Hennessey, Brian Requarth and Javier Mata.

Jonathan Lewy, co-founder of Grin Scooters and founder of Investo, is also an investor in Rappi. He said Garcia was building a product for the end user, with the key being the building of the infrastructure and inventory. Lewy believes Garcia understands how quick delivery should be done and that it is not just about offering a mobile app, but building the technology behind it.

Meanwhile, Justin Mateen, general partner at JAM Fund, and co-founder of Tinder and an early-stage investor, met Garcia over a year ago and was one of the company’s first investors. He said Garcia’s and Gonzalez’s initial idea for the model of grocery stores was still not solving the problem, but then they pivoted to doing fulfillment and inventory themselves.

“He fits the mold of what I look for in a founder, and he is the type of founder that doesn’t give up,” Mateen said. “Luis finally agreed to let me double down on my investment. The model makes sense now, he is on to something and it is now going to be about execution of capital as he scales.”

Both Mateen and Lewy agree that there will be similar apps coming because food delivery is such a large market, but that Orchata has a clear advantage of owning the customer experience from beginning to end.

Having only launched four months ago, Orchata is already processing thousands of orders and is seeing 100% monthly growth. The new funding will enable Orchata to expand into three new cities in Mexico. Garcia is also eyeing Colombia, Brazil, Peru and Chile for future expansion.

The company is also targeting multiple use cases, including someone noticing a forgotten item while cooking to consumers shopping for the week or teenagers needing food for a party.

“We are going to be super convenient to customers, and we think every use case for food delivery will be this way in the future,” Garcia said. “We will eventually introduce our own brands and foods with the goal of being that app that is there anytime you need it.”

 

#apps, #ecommerce, #fj-labs, #food, #food-delivery, #foundation-capital, #funding, #grocery-store, #investo, #jam-fund, #javier-gonzalez, #jonathan-lewy, #justin-mateen, #latin-america, #luis-mario-garcia, #mexico, #online-food-ordering, #orchata, #rappi, #recent-funding, #startups, #tc, #venture-friends, #y-combinator

Deliveroo could leave Spanish market ahead of on-demand labor reclassification

Deliveroo announced today that it is considering leaving the Spanish market, citing limited market share and a long road of investment with “highly uncertain long-term potential returns” on the horizon.

The company, an on-demand outfit based in the U.K., went public earlier in 2021. Its shares initially sagged, drawing concern about both the value of on-demand companies and tech concerns listing in London more broadly. However, shares of Deliveroo have since recovered, and the company’s second-quarter earnings report saw it raise its expected gross order volume growth expectations “from between 30% to 40% to between 50% to 60%.”

Given its rising growth expectations and improving public-market valuation, you may be surprised that Deliveroo is willing to leave any of the 12 markets in which it currently operates. In the case of Spain, it appears that Deliveroo is concerned that changes to local labor laws will make its operations more expensive in the country, which, given its modest market share, is not palatable.

Recall that Spain adopted a law in May — a law generally agreed to in March — requiring on-demand companies to hire their couriers. This is the sort of arrangement that on-demand companies in food delivery and ride-hailing have long fought; many on-demand companies are unprofitable without hiring couriers, and doing so could raise their costs. The possibility of worsened economics makes such changes to labor laws in any market a worry for startups and public companies alike that lean on freelance delivery workers.

Let’s parse the Deliveroo statement to better understand the company’s perspective. Here’s the introductory paragraph:

Deliveroo today announces that it proposes to consult on ending its operations in Spain. Deliveroo currently operates across 12 markets worldwide, with the vast majority of the Company’s gross transaction value (GTV) coming from markets where Deliveroo holds a #1 or #2 market position.

Translation: We’re probably leaving Spain. Most of our order volume comes from markets where we are in a leading position (the company competes with Uber Eats, Glovo and Just Eat in different markets). We are not in a leading position in Spain.

Spain represents less than 2% of Deliveroo’s GTV in H1 2021. The Company has determined that achieving and sustaining a top-tier market position in Spain would require a disproportionate level of investment with highly uncertain long-term potential returns that could impact the economic viability of the market for the Company. 

Translation: Spain is a very small market for Deliveroo. To gain lots of market share in Spain would be very costly, and the company isn’t sure about the long-term profitability of the country’s business. This is where labor issues like this come into play — investing to gain market share in a country where your business is less profitable is hard to pencil out.

And according to El Pais, the decision by Deliveroo comes as it was up against a deadline regarding worker reclassification. That may have contributed to the timing of the announcement.

From this juncture, Deliveroo spends three paragraphs discussing how it will support workers in case it does leave the Spanish market. It closes with the following:

This proposal does not impact previously communicated full-year guidance on Group annual GTV growth and gross profit margin.

Fair enough.

On-demand companies have made arguments over the years that changes to labor laws that would push more costs onto their plates in the form of hiring couriers — or simply paying them more — would make certain markets uneconomic and drive them away. Here, Deliveroo can follow through with an exit at essentially no cost, given how small its order volume is compared to its other 11 markets.

#deliveroo, #food-delivery, #just-eat, #labor, #london, #online-food-ordering, #spain, #uber-eats, #united-kingdom

Colombia’s Merqueo bags $50M to expand its online grocery delivery service across Latin America

Merqueo, which operates a full-stack, on-demand delivery service in Latin America, has landed $50 million in a Series C round of funding.

IDC Ventures, Digital Bridge and IDB Invest co-led the round, which also included participation from MGM Innova Group, Celtic House Venture Partners, Palm Drive Capital and previous shareholders. The financing brings the Bogota, Colombia-based startup’s total raised to $85 million since its 2017 inception.

Merqueo CEO and co-founder Miguel McAllister knows a thing or two about the delivery space in Latin America, having also co-founded Domicilios.com, a Latin American food delivery company that was bought by Berlin-based Delivery Hero and later merged with Brazil’s iFood.

McAllister describes Merqueo as a “pure-play online supermarket with a fully integrated grocery delivery service” that sources directly from large brands and local suppliers, bypassing intermediaries and “delivering directly from its dark store network.” (Dark stores are traditional retail stores that have been converted to local fulfillment centers.”

Merqueo offers more than 8,000 products, including fresh foods, packaged goods, home essentials, beverages and frozen products. It currently operates in more than 25 cities in Colombia, Mexico and Brazil and has over 600,000 users.

Image Credits: Merqueo

It must be doing something right. The startup is close to $100 million in “run-rate revenue,” according to McAllister, having grown more than 2.5x in 2020. Merqueo also reached positive cash flow in Colombia, its most mature market. Over the last year, large Latin American retail chains and retailers have approached the company about potentially acquiring it, McAllister said.

Part of the company’s success might be attributed to the speed and flexibility it offers. Users can choose how and when to receive their groceries according to their needs, with the startup offering delivery in as little as 10 minutes or three to four hours. Users can also schedule delivery of their groceries in two-hour intervals for the same day or the next day.

Also, owning and controlling the “entire” vertical supply chain gives it the ability to obtain better margins, offer competitive pricing and achieve healthy unit economics, according to McAllister.

Merqueo plans to use its new capital in part to expand geographically. The company is currently in phase one of its expansion to Brazil, entering initially in Sao Paulo later this month. Next year, it expects to launch in other Brazilian cities such as Rio de Janeiro, Fortaleza and Salvador de Bahia.

The market opportunity in Latin America is massive considering that online grocery sales only represent just 1% of the market –– far lower than in the U.S., EU or China, for example. Other players in the increasingly crowded space include GoPuff in the U.S., Getir out of Turkey and Mexico-based Jüsto, which raised $65 million in a Series A led by General Atlantic earlier this year.

“The pandemic accelerated the adoption of online grocery shopping in LatAm,” McAllister told TechCrunch. “The region went from 0.3% share of online groceries to 1%. And after the pandemic, we are seeing a 50% increase in the pace of user adoption.” Overall, the $85 billion e-commerce market in Latin America is growing rapidly, with projections of it reaching $116.2 billion in 2023.

Currently, Merqueo has over 1,300 employees in LatAm, up 60% from last year. It plans to continue hiring with the proceeds from the Series C round as well work “to become the largest and most ambitious dark stores network of Latin America.”

Alejandro Rodríguez, managing partner at IDC Ventures, is naturally bullish on Merqueo’s potential.

“From all the opportunities we looked into, Merqueo is undoubtedly the most advanced in the region. … The Merqueo team has proved they know how to scale the business and how to get to profitability,” Rodríguez told TechCrunch.

Online grocery delivery is a business with many technical and operational complexities, he said. In his view, Merqueo’s technology and operational expertise allow it to tackle those issues in a way that has led to “the best customer experience that we have seen in a scalable way.”

“They have the best combination of both great service metrics and healthy unit economics,” Rodríguez added.

#apps, #berlin, #brazil, #celtic-house-venture-partners, #china, #colombia, #companies, #delivery-hero, #domicilios-com, #ecommerce, #european-union, #food-delivery, #funding, #fundings-exits, #grocery-store, #idc-ventures, #latin-america, #mexico, #online-food-ordering, #online-groceries, #palm-drive-capital, #recent-funding, #sao-paulo, #startups, #tc, #turkey, #united-states, #venture-capital

Powered by local stores, JOKR joins the 15 min grocery race with a $170M Series A

“We are true believers in the fact that the world needs a new Amazon, a better one, a more sustainable one, one that appreciates local areas and products.” It’s quite one thing to claim you are out to replace Amazon (just as its founder goes into space), but Ralf Wenzel, Founder and CEO of JOKR, certainly believes his company might have a shot. And he’s raising plenty of money to aim at that goal.

Today the fast-growing grocery and retail delivery platform has closed a whopping $170 million Series A funding round. The round comes three months after the company started operations in the U.S., Latin America, and Europe. JOKR’s team consists of people who created both foodpanda and Delivery Hero, so from the outside at least, they have the chops to build a big business.

The round was led by Led by GGV Capital, Balderton Capital, and Tiger Global Management. It was joined by Activant Capital, Greycroft, Fabrice Grinda’s FJ Labs, as well as Latin America’s tech-specialized VC firms Kaszek and Monashees, as did HV Capital, the first institutional investor.

Based out of New York, where it launched last month JOKR plans to roll out across cities in the U.S., Latin America and Europe. Right now it’s live in nine cities, across Latin American countries, Brazil, Mexico, Colombia, Peru, as well as Poland and Austria in Europe.

Wenzel said: “The investment we announced today will empower us to continue our expansion at an unprecedented rate as we continue to build JOKR into the premier platform for a new generation of online shopping, with instant delivery, a focus on local product offerings and more sustainable delivery and supply chains. We are proud to be able to partner with such a distinguished group of international tech investors to help us seize the enormous opportunity in front of us.”

JOKR’s pitch is that it enables small local businesses to sell their goods, sourced from other local businesses, via the platform, thus expanding their reach without the need for complex logistics and delivery networks on their own. But that local aspect also builds sustainability into the model.

Hans Tung, Managing Partner at GGV Capital, and newly appointed member of JOKR’s board said: “Ralf has put together an all-star team for food delivery that will transform the retail supply chain. The combination of food delivery experience and the sophisticated data capabilities that optimizes inventory allocation and dispatch, set JOKR apart. We look forward to working with the team on their mission to make retail more instant, more democratic, and more sustainable.”

JOKR is joining other fast-delivery grocery providers like Gorillas and Getir in providing a 15 minute delivery time for supermarket and convenience products, pharmaceuticals, but also ‘exclusive’ local products that are not available in regular supermarkets. Although, so far, it only has an app on Google Play.

Speaking at an interview with me Wenzel said: “We are close to the equivalent of Instacart, strongly grocery focused. Our offering is significantly broader than the ones of Gorillas because we’re not only focusing on convenience and all kinds of different grocery categories, we’re getting closer to a supermarket offering, so the biggest competing element would be the traditional supermarkets, the offline supermarkets, as well as online grocery propositions. We are vertically integrating and hence procuring directly, cutting out middlemen and building our own distribution warehouses.”

#activant-capital, #amazon, #austria, #balderton-capital, #brazil, #ceo, #colombia, #delivery-hero, #distribution, #europe, #food-delivery, #foodpanda, #getir, #ggv-capital, #gorillas, #grocery-store, #hans-tung, #hv-capital, #instacart, #jokr, #latin-america, #managing-partner, #mexico, #new-york, #online-food-ordering, #online-shopping, #peru, #pharmaceuticals, #poland, #premier, #ralf-wenzel, #retailers, #tc, #tiger-global-management, #united-states

Colombian on-demand delivery startup Rappi raises ‘over’ $500M at a $5.25B valuation

Rappi, a Colombian on-demand delivery startup, has raised “over” $500 million at a $5.25 billion valuation in a Series G round led by T. Rowe Price, the company announced late Friday.

Baillie Gifford, Third Point, Octahedron, GIC SoftBank, DST Global, Y Combinator, Andreessen Horowitz and Sequoia Capital and others also participated in the round.

The new financing brings Rappi’s total raised since its 2015 inception to over $2 billion, according to Crunchbase. Today, the country has operations in 9 countries and more than 250 cities across Latin America. Its last raise was a $300 million a Series F funding round in September of 2020.

According to the Latin American Venture Capital and Private Equity Association (LAVCA), Rappi focused on delivering beverages and first, and has since expanded into meals, groceries, tech goods and medicine. The company also offers a cash withdrawal feature, allowing users to pay with credit cards and then receive cash from one of Rappi’s delivery agents. Today, the company says its app allows consumers to “order nearly any good or service.”

In addition to traditional delivery, it says “users can get products delivered in less than 10 minutes, can access financial services, as well as ‘whims,” and “favors.’ Whims allow users to order anything available in their coverage area. Favors offer an array of custom services, such as running an errand, going to the hardware store or picking out and delivering a gift. The two products allow users to connect directly with a courier. 

Simón Borrero, Sebastian Mejia, and Felipe Villamarin launched the company in 2015, graduating from Y Combinator the following year. A16z’s initial investment in July 2016 was the Silicon Valley firm’s first investment in Latin America, according to LAVCA.

#andreessen-horowitz, #apps, #baillie-gifford, #colombia, #companies, #delivery, #dst-global, #feature, #funding, #fundings-exits, #gic, #latin-america, #online-food-ordering, #rappi, #recent-funding, #reddit, #sequoia-capital, #softbank, #softbank-group, #startup, #startups, #t-rowe-price, #venture-capital, #websites, #y-combinator

Firat Ileri becomes Hummingbird VC’s new Managing Partner, as the firm looks to expand

Seed investment firm Hummingbird VC, which previously invested in Deliveroo, Peak Games, MarkaVIP, and Kraken has a new Managing Partner. Firat Ileri, previously a Partner – who at 28 became one of Europe’s youngest VCs when he joined in 2012 – takes over from Founding Partner Barend Van den Brande, who will now take on a more strategic role at the firm.

Ileri grew up in Cyprus and went on to study electrical engineering, computer science, and operations research at MIT. At Hummingbird he has lead the firm’s first investments in Latin America and in South East Asia.

Ileri initially introduced the cofounders of Gram Games, led their first investment, and helped exit the company to Zynga for half a billion. He also led the sale process of Peak Games in 2020, which exited at $1.8Bn, making history as Turkey’s largest tech exit to date.

Founded in 2010, Hummingbird is currently on its fourth fund of $200M, raised in Q4 2020, and says it invests from Europe to India, SEA, LATAM, Turkey and more recently in the US.
 
Firat most recently led Hummingbird’s first investments in engineering biology, investing in Billiontoone, the SF-based precision diagnostics company in the prenatal and liquid biopsy space, which has raised a $55M Series B round. It’s also invested in Kernal Biologics, an mRNA 2.0 therapeutics company focused on oncology.

Van den Brande said: “From the moment Firat joined us in the very early days of Hummingbird, he hit the ground running. His eye for unique and ambitious founding teams, and unparalleled expertise in Seed investing, persistence and really understanding what Early Stage companies need has made him an invaluable asset to Hummingbird and all of the founders we work with. I’m only pleased to have Firat take on the role and lead the Hummingbird family and portfolio for years to come.”

Ileri said the firm’s thesis was to invest in stand-out founders: “We’re spending much more time trying to understand who these people are and what makes them special. In a way, we’re looking for anomalies in people, and we believe that the best companies are created with nonlinear backgrounds. So, this is the thesis.”

He said the team has expanded to drive this vision: “We used to be a boutique fund, but we have the ambition to be more and especially to look for founders who have an independent mind and huge ambitions. To be able to find more companies we’ve gone more global, in order to have a better chance of finding these special stories.”

#corporate-finance, #cyprus, #deliveroo, #europe, #finance, #hummingbird, #india, #investment, #latin-america, #managing-partner, #mit, #money, #online-food-ordering, #seed-money, #south-east-asia, #tc, #turkey, #united-states, #van, #venture-capital, #zynga

Italy’s DPA fines Glovo-owned Foodinho $3M, orders changes to algorithmic management of riders

Algorithmic management of gig workers has landed Glovo-owned on-demand delivery firm Foodinho in trouble in Italy where the country’s data protection authority issued a €2.6 million penalty (~$3M) yesterday after an investigation found a laundry list of problems.

The delivery company has been ordered to make a number of changes to how it operates in the market, with the Garante’s order giving it two months to correct the most serious violations found, and a further month (so three months total) to amend how its algorithms function — to ensure compliance with privacy legislation, Italy’s workers’ statute and recent legislation protecting platform workers.

One of the issues of concern to the data watchdog is the risk of discrimination arising from a rider rating system operated by Foodinho — which had some 19,000 riders operating on its platform in Italy at the time of the Garante’s investigation.

Likely of relevance here is a long running litigation brought by riders gigging for another food delivery brand in Italy, Foodora, which culminated in a ruling by the country’s Supreme Court last year that asserted riders should be treated as having workers rights, regardless of whether they are employed or self-employed — bolstering the case for challenges against delivery apps that apply algorithms to opaquely micromanage platform workers’ labor.

In the injunction against Foodinho, Italy’s DPA says it found numerous violations of privacy legislation, as well as a risk of discrimination against gig workers based on how Foodinho’s booking and assignments algorithms function, in addition to flagging concerns over how the system uses ratings and reputational mechanisms as further levers of labor control.

Article 22 of the European Union’s General Data Protection Regulation (GDPR) provides protections for individuals against being solely subject to automated decision-making including profiling where such decisions produce a legal or similarly substantial effect (and access to paid work would meet that bar) — giving them the right to get information on a specific decision and object to it and/or ask for human review.

But it does not appear that Foodinho provided riders with such rights, per the Garante’s assessment.

In a press release about the injunction (which we’ve translated from Italian with Google Translate), the watchdog writes:

“The Authority found a series of serious offences, in particular with regard to the algorithms used for the management of workers. The company, for example, had not adequately informed the workers on the functioning of the system and did not guarantee the accuracy and correctness of the results of the algorithmic systems used for the evaluation of the riders. Nor did it guarantee procedures to protect the right to obtain human intervention, express one’s opinion and contest the decisions adopted through the use of the algorithms in question, including the exclusion of a part of the riders from job opportunities.

“The Guarantor has therefore required the company to identify measures to protect the rights and freedoms of riders in the face of automated decisions, including profiling.

The watchdog also says it has asked Foodinho to verify the “accuracy and relevance” of data that feeds the algorithmic management system — listing a wide variety of signals that are factored in (such as chats, emails and phone calls between riders and customer care; geolocation data captured every 15 seconds and displayed on the app map; estimated and actual delivery times; details of the management of the order in progress and those already made; customer and partner feedback; remaining battery level of device etc).

“This is also in order to minimize the risk of errors and distortions which could, for example, lead to the limitation of the deliveries assigned to each rider or to the exclusion itself from the platform. These risks also arise from the rating system,” it goes on, adding: “The company will also need to identify measures that prevent improper or discriminatory use of reputational mechanisms based on customer and business partner feedback.”

Glovo, Foodinho’s parent entity — which is named as the owner of the platform in the Garante’s injunction — was contacted for comment on the injunction.

A company spokesperson told us they were discussing a response — so we’ll update this report if we get one.

Glovo acquired the Italian food delivery company Foodinho back in 2016, making its first foray into international expansion. The Barcelona-based business went on to try to build out a business in the Middle East and LatAm — before retrenching back to largely focus on Southern and Eastern Europe. (In 2018 Glovo also picked up the Foodora brand in Italy, which had been owned by German rival Delivery Hero.)

The Garante says it collaborated with Spain’s privacy watchdog, the AEDP — which is Glovo’s lead data protection supervisor under the GDPR — on the investigation into Foodinho and the platform tech provided to it by Glovo.

Its press release also notes that Glovo is the subject of “an independent procedure” carried out by the AEPD, which it says it’s also assisting with.

The Spanish watchdog confirmed to TechCrunch that joint working between the AEPD and the Garante had resulted in the resolution against the Glovo-owned company, Foodinho.

The AEPD also said it has undertaken its own procedures against Glovo — pointing to a 2019 sanction related to the latter not appointing a data protection officer, as is required by the GDPR. The watchdog later issued Glovo with a fined of €25,000 for that compliance failure.

However it’s not clear why the AEDP has — seemingly — not taken a deep dive look at Glovo’s own compliance with the Article 22 of the GDPR. (We’ve asked it for more on this and will update if we get a response.)

It did point us to recently published guidance on data protection and labor relations, which it worked on with Spain’s Ministry of Labor and the employers and trade union organizations, and which it said includes information on the right of a works council to be informed by a platform company of the parameters on which the algorithms or artificial intelligence systems are based — including “the elaboration of profiles, which may affect the conditions, access and maintenance of employment”.

Earlier this year the Spanish government agreed upon a labor reform to expand the protections available to platform workers by recognizing platform couriers as employees.

The amendments to the Spanish Workers Statute Law were approved by Royal Decree in May — but aren’t due to start being applied until the middle of next month, per El Pais.

Notably, the reform also contains a provision that requires workers’ legal representatives to be informed of the criteria powering any algorithms or AI systems that are used to manage them and which may affect their working conditions — such as those affecting access to employment or rating systems that monitor performance or profile workers. And that additional incoming algorithmic transparency provision has evidently been factored into the AEPD’s guidance.

So it may be that the watchdog is giving affected platforms like Glovo a few months’ grace to allow them to get their systems in order for the new rules.

Spanish labor law also of course remains distinct to Italian law, so there will be ongoing differences of application related to elements that concern delivery apps, regardless of what appears to be a similar trajectory on the issue of expanding platform workers rights.

Back in January, for example, an Italian court found that a reputation-ranking algorithm that had been used by another on-demand delivery app, Deliveroo, had discriminated against riders because it had failed to distinguish between legally protected reasons for withholding labour (e.g., because a rider was sick; or exercising their protected right to strike) and other reasons for not being as productive as they’d indicated they would be.

In that case, Deliveroo said the judgement referred to a historic booking system that it said was no longer used in Italy or any other markets.

More recently a tribunal ruling in Bologna — found a Collective Bargaining Agreement signed by, AssoDelivery, a trade association that represents a number of delivery platforms in the market (including Deliveroo and Glovo), and a minority union with far right affiliations, the UGL trade union, to be unlawful.

Deliveroo told us it planned to appeal that ruling.

The agreement attracted controversy because it seeks to derogate unfavorably from Italian law that protects workers and the signing trade body is not representative enough in the sector.

Zooming out, EU lawmakers are also looking at the issue of platform workers rights — kicking off a consultation in February on how to improve working conditions for gig workers, with the possibility that Brussels could propose legislation later this year.

However platform giants have seen the exercise as an opportunity to lobby for deregulation — pushing to reduce employment standards for gig workers across the EU. The strategy looks intended to circumvent or at least try to limit momentum for beefed up rules coming a national level, such as Spain’s labor reform.

#algorithmic-accountability, #artificial-intelligence, #barcelona, #deliveroo, #delivery-hero, #europe, #european-union, #food-delivery, #gdpr, #general-data-protection-regulation, #glovo, #italy, #labor, #online-food-ordering, #policy, #privacy, #spain

Lollipop AI launches online grocery marketplace where you can build your own recipes

As I’ve taken to online grocery shopping over the pandemic, I’ve always wondered why supermarkets didn’t offer simple ‘recipe’ features that would have automatically collected items for a homemade meal. It seemed an opportunity missed. But it is missed no more.

Lollipop AI, the new British online grocery marketplace, is launching its public beta today to do that, and it’s been created by a serial UK entrepreneur who was there at the start of successful UK startups Osper, Monzo and Curve.

Founder and CEO Tom Foster-Carter has envisaged a platform allowing people to build meal plans from recipes, assembling the ingredients automatically into their shopping basket, and suggesting remaining household essentials. He says could well help with health goals, improve culinary skills and minimize food waste. Built as a marketplace, it will be partnering with Sainsbury’s and BBC Good Food with more partners and fulfillment will be completed by retail partners. The business model will be taking a small commission from retail partners, allowing selected advertising, e.g. from CPG brand owners, and a Paid Premium tier later this year.

The site will be free to use, while a premium tier is planned. The first ten thousand Beta testers to sign up to the waitlist will be offered access to premium features “for life”, says the startup, which will offer prices at the same rate as normal supermarkets.

Foster-Carter, who had the idea after having a baby and realizing he was spending hours trying to use a normal supermarket, says the approach will save several hours a week for the average household. (We will briefly overlook the fact that a man had to create a site like this after doing the weekly shop…). Lollipop claims 80% of households spend over an hour a week meal-planning and online grocery shopping.

Lollipop MealPlanner

Lollipop MealPlanner

The founding team includes former employees of Monzo, Farmdrop, Amazon, Sainsbury’s and HelloFresh, such as cofounders Chris Parsons and Ib Warnerbring.

Although Foster-Carter is coy about how much he has raised for this approach, he says he has raised a pre-seed round backed by JamJar Investments, Speedinvest, and a “raft of grocery/technology big hitters” including Ian Marsh (former UK GM of HelloFresh) and former leadership and founders of online grocers in the UK and abroad plus ‘super-angels’ Charles Songhurst and Ed Lando.

In particular, the site is likely to appeal to people looking to lose weight, as meal planning would be simpler, and may even have an impact on recipe-box startups.

Lollipop is not alone in its ambitions. Jupiter.co in the US bills itself as “groceries on autopilot”; Jow is recipe-led shopping, as is Side Chef; while Cooklist is a meal-planner + cooking support, also in the US.

Foster-Carter told me: “It’s a marketplace so we could partner with traditional supermarkets (Sainbury’s, Tescos, Waitrose etc) + online retailers (Ocado, Amazon), direct to farm / organic (Riverford, Farmdrop), mission-led single component (Oddbox, Milk & More, etc); recipe boxes (Gousto, Hello Fresh, Mindful Chef etc); and rapid delivery (Gorillas, Getir, Weezy, etc).”

He said: “This is just the start… The plan is to be the single place you go to for all your food needs – we’ll enable you to order your Deliveroo or restaurant kit (e.g. Dishpatch) from us. Groceries are delivered by our partners and then when it’s time to cook you’ll be able to use a cooking companion app (due out next month). In the future you’ll be able to improve your cooking skills through Lollipop.”

Few players have nailed the ability to buy a lot of items (50-100+) really fast, not even Amazon – this might be Lollipop’s USP, if it can crack it.

 

#amazon, #ceo, #curve, #deliveroo, #europe, #food, #food-waste, #grocery-store, #hello-fresh, #hellofresh, #lollipop, #monzo, #ocado, #online-food-ordering, #retailers, #rocket-internet, #tc, #tom-foster-carter, #united-kingdom, #united-states, #waitrose

Kenyan foodtech startup Kune raises $1M pre-seed for its ready-to-eat meals service

While there has been a wave of innovation in food tech worldwide, it’s still in early days for Africa. There are only a handful of African food-tech startups, and a year and a half’s worth of global pandemic has added a couple to that list.

Kune is one of the most recent food-tech startups, and today, the six-month-old Kenyan-based company is announcing that it has closed a $1 million pre-seed round to launch its on-demand food service in August.

Pan-African venture capital firm Launch Africa Ventures led the pre-seed round. Other investors that took part include Century Oak Capital GmbH and Consonance, with a contribution from ecosystem management firm Pariti

Founded by CEO Robin Reecht in December 2020, Kune delivers freshly made, ready-to-eat meals at arguably affordable prices. When Reetch first came to Kenya from France in November 2020, it wasn’t easy to get affordable ready-to-eat meals.

“After three days of coming into Kenya, I asked where I can get great food at a cheap price, and everybody tell me it’s impossible,” he told TechCrunch. “It’s impossible because either you go to the street and you eat street food, which is really cheap but with not-so-good quality, or you order on Uber Eats, Glovo or Jumia, where you get quality but you have to pay at least $10.”

Reetch noticed a gap in the market and sought to fill it. The next month, he decided to start Kune. The goal? To provide affordable, convenient and tasty meals. It took a week to develop a pilot, and with a ready waitlist of 50 customers in a particular office space, his plans were in motion. Kune sold more than 500 meals ($4 average) and tripled its customer base from 50 to 150.

Customers were particularly excited about the product and Kune raised $50,000 from them to continue operations, Reetch said. After that, however, the orders became too large for the small team that they couldn’t keep up; at one point, it received 50 orders per day. Thus, instead of advancing with a momentum that could break down, the team took a hiatus.

“We had started to mess up the order because, you know, it’s complicated to get food right when you’re just in a small kitchen setting. So I said okay, that there is no point doing that, and the demand is so high and better to do things right.”

The next months were spent restructuring the company, making hires and building a factory to produce 5,000 meals per day. Then, when the company was ready to raise, Reetch said he saw the same enthusiasm from customers and investors. In two months, Kune closed this round, one of the largest in East Africa, and is one of the few non-fintechs to have raised a seven-figure pre-seed round on the continent.

In a fast-growing and crowded restaurant and food delivery marketplace in Kenya, Kune wants to offer a new way for busy people in Nairobi to access meals by finding a balance between Kibanda pricing (usually referred to as the typical local roadside food shop) and on-demand food delivery prices from global companies.

Kune applies a hybrid model, combining both cloud and dark kitchen concepts. Kune meals are cooked and packaged in its factory and delivered directly to online, retail and corporate customers.

The hybrid model speaks to why Launch Africa cut a check for Kune. And according to the director of the firm, Baljinder Sharma, “leveraging the cloud kitchen model and owning the entire supply chain provides a massive growth and scaling opportunity for Kune Africa.” He added: “We are looking forward to seeing the business take off and grow.”

Kune plans to fully launch in August after its new factory is completed. Per details on its site, the company is promising customers that delivery will be done on an average of 30 minutes daily.

To achieve this, Kune ensures that it owns the entire supply chain, from cooking to packaging to delivery with its own drivers and motorbikes. “Our strategy is to internalize all production and human resources capacities,” he stated. That’s where Kune will put most of the funds to use going forward. In addition to the factory, which costs about 10% of the total investment, Kune will be looking to build a huge team. Reetch tells me that judging by how operations-heavy Kune is, the team size will reach 100 come December.

Once launched, the company will build its own fleet of 100 electric motorcycles by early 2022. In addition, there are plans to hire 100 female drivers.

Currently, Kune showcases three different meals daily: two continental dishes and one foreign meal. In the coming months and quarters, Kune’s offerings will cut across microwavable meals, weight reduction meals and retail meals to target European and U.S. clients. For the latter, Reetch is enthusiastic about exporting the African food culture to Western countries. As someone who travels a lot, the CEO thinks Kenya, unlike other countries, doesn’t have a strong food culture. He references food media like TV shows where various meals and cuisines and tutorings on how to cook food are showcased. Reetch wants Kune to be the go-to for such programs in Kenya.

“In Kenya, we don’t have any culinary show. So we are going to take that position as the culinary major of Kenya, and how do you create this? By creating amazing content, which we plan to do by creating videos and writing articles on how to cook or maybe just food business in general.”

#africa, #east-africa, #food, #food-delivery, #food-tech, #funding, #glovo, #kenya, #kune, #launch-africa, #online-food-ordering, #pariti, #recent-funding, #startups, #tc

Belvo, LatAm’s answer to Plaid, raises $43M to scale its API for financial services

Belvo, a Latin American startup which has built an open finance API platform, announced today it has raised $43 million in a Series A round of funding.

A mix of Silicon Valley and Latin American-based VC firms and angels participated in the financing including Future Positive, Kibo Ventures, FJ Labs, Kaszek, MAYA Capital, Venture Friends, Rappi co-founder and president Sebastián Mejía (Rappi), Harsh Sinha, CTO of Wise (formerly Transferwise) and Nubank CEO and founder David Vélez.

Citing Crunchbase data, Belvo believes the round represents the largest series A ever raised by a Latin American fintech. In May 2020, Belvo raised a $10 million seed round co-led by Silicon Valley’s Founders Fund and Argentina’s Kaszek.

Belvo aims to work with leading fintechs in Latin America, spanning across verticals like the neobanks, credit providers and personal finance products Latin Americans use every day.

The startup’s goal with its developer-first API platform that can be used to access and interpret end-user financial data is to build better, more efficient and more inclusive financial products in Latin America. Developers of popular neobank apps, credit providers and personal finance tools use Belvo’s API to connect bank accounts to their apps to unlock the power of open banking.

As TechCrunch Senior Editor Alex Wilhelm explained in this piece last year, Belvo might be considered similar to U.S.-based Plaid, but more attuned to the Latin American market so it can take in a more diverse set of data to better meet the needs of the various markets it serves. 

So while Belvo’s goals are “similar to the overarching goal[s] of Plaid,” co-founder and co-CEO Pablo Viguera told TechCrunch that Belvo is not merely building a banking API business hoping to connect apps to financial accounts. Instead, Belvo wants to build a finance API, which takes in more information than is normally collected by such systems. Latin America is massively underbanked and unbanked so the more data from more sources, the better.

“In essence, we’re pushing for similar outcomes [as Plaid] in terms of when you think about open banking or open finance,” Viguera said. “We’re working to democratize access to financial data and empower end users to port that data, and share that data with whoever they want.”

The company operates under the premise that just because a significant number of the region’s population is underbanked doesn’t mean that they aren’t still financially active. Belvo’s goal is to link all sorts of accounts together. For example, Viguera told TechCrunch that some gig-economy companies in Latin America are issuing their own cards that allow workers to cash out at small local shops. In time, all those transactions are data that could be linked up using Belvo, casting a far wider net than what we’re used to domestically.

The company’s work to connect banks and non-banks together is key to the company’s goal of allowing “any fintech or any developer to access and interpret user financial data,” according to Viguera.

Viguera and co-CEO Oriol Tintoré founded in May of 2019, and was part of Y Combinator’s Winter 2020 batch. Since launching its platform last year, the company says it has built a customer base of over 60 companies across Mexico, Brazil and Colombia, handling millions of monthly API calls. 

This is important because as Alex noted last year, similar to other players in the API-space, Belvo charges for each API call that its customers use (in this sense, it has a model similar to Twilio’s). 

Image Credits: Co-founders and co-CEOs Oriol Tintore and Pablo Viguera / Belvo

Also, over the past year, Belvo says it expanded its API coverage to over 40 financial institutions, which gives companies the ability to connect to over 90% of personal and business bank accounts in LatAm, as well as to tax authorities (such as the SAT in Mexico) and gig economy platforms.

“Essentially we take unstructured financial data , which an individual might have outside of a bank such as integrations we have with gig economy platforms such as Uber and Rappi. We can take a driver’s information from their Uber app, which is kind of built like a bank app and turn it into meaningful bank-like info which third parties can leverage to make assessments as if it’s data coming from a bank,” Viguera explained.

The startup plans to use its new capital to scale its product offering, continue expanding its geographic footprint and double its current headcount of 70. Specifically, Belvo plans to hire more than 50 engineers in Mexico and Brazil by year’s end. It currently has offices in Mexico City, São Paulo, and Barcelona. The company also aims to  launch its bank-to-bank payment initiation offering in Mexico and Brazil.

Belvo currently operates in Mexico, Colombia and Brazil. 

But it’s seeing “a lot of opportunity” in other markets in Latin America, especially in Chile, Peru and Argentina, Viguera told TechCrunch. “In due course, we will look to pursue expansion there.” 

Fred Blackford, founding partner of Future Positive, believes Belvo represents a “truly transformational opportunity for the region’s financial sector.”

Nicolás Szekasy, co-founder and managing partner of Kaszek, noted that demand for financial services in Latin America is growing at an exponential rate .

“Belvo is developing the infrastructure that will enable both the larger institutions and the emerging generation of younger players to successfully deploy their solutions,” he said. “ Oriol, Pablo, and the Belvo team have been leading the development of a sophisticated platform that resolves very complex technical challenges, and the company’s exponential growth reflects how it is delivering a product that fits perfectly with the requirements of the market.” 

#alex-wilhelm, #api, #argentina, #bank, #banking, #barcelona, #belvo, #brazil, #ceo, #chile, #co-ceo, #colombia, #cto, #david-velez, #driver, #editor, #finance, #financial-services, #fj-labs, #founders-fund, #funding, #fundings-exits, #kaszek, #kibo-ventures, #latin-america, #mexico, #mexico-city, #nubank, #online-food-ordering, #open-banking, #open-finance, #peru, #rappi, #recent-funding, #sao-paulo, #startup, #startups, #tc, #technology, #twilio, #uber, #vc, #venture-capital, #wise, #y-combinator

On-demand grocery startup Food Rocket launches in the Bay Area, goes up against delivery giants

On-demand grocery startups like Gorillas are invading Europe right now, but although on-demand-everything is kinda old-hat in the Bay Area, a new startup thinks it might just be able to do something new.

Food Rocket says it has raised a $2 million investment round from AltaIR Capital, Baring Vostok fund, and the AngelsDeck group of business angels, including Philipp Bashyan, of Russia’s Yonder, who has joined as an investor and advisor.

Yes, admittedly ok this tiny startup is competing with DoorDash, GoPuff, InstaCart and Amazon Fresh. Maybe let’s not into that…

Using the company’s mobile app, users can order fresh groceries, ready-to-eat meals, and household goods that will be delivered within 10-15 minutes, says the startup, which will be servicing SoMa, South Park, Mission Bay, Japantown, Hayes Valley, and others. The company hopes to open 150 ‘dark stores’ on the West Coast as part of its infrastructure.

Vitaly Aleksandrov, CEO, and co-founder of Food Rocket said: “The level of competition in this market in the U.S. is still manageable, which is why we have the opportunity to become leaders in the sphere of fast delivery of basic products and household goods. We aim to replace brick-and-mortar supermarkets and to change consumers’ current habits in regards to grocery shopping.”

What can we say? Good luck?

#advisor, #altair-capital, #amazon, #doordash, #europe, #gopuff, #gorillas, #grocery-store, #instacart, #online-food-ordering, #retailers, #russia, #tc, #united-states, #west-coast

Glovo splurges $208M on three Delivery Hero brands in the Balkans

The high stakes game of chess (or, well, consolidation chicken) that is on-demand food delivery rolls on today with a little more territorial swapping in Europe: Barcelona-based Glovo has agreed to buy three of Berlin-based Delivery Hero’s food delivery brands in Central and Eastern Europe — with deals that it said are worth a total value of €170 million (~$208M).

Specifically, it’s picking up Delivery Hero’s foodpanda brand in Romania and Bulgaria; the Donesi brand in Serbia, Montenegro, Bosnia and Herzegovina; and Pauza in Croatia.

There’s some notable symmetry here: Last year Delivery Hero shelled out $272M for a bunch of Glovo’s LatAm brands, as the latter gave up on a region it had already started withdrawing from in its quest for profitability.

Glovo said then that it would be focusing on “key markets where we can build a long-term sustainable business and continue to provide our unique multi-category offering to our customers”.

Earlier this month the Barcelona-based ‘deliver anything’ app also announced it was picking up Ehrana, a local delivery company in Slovenia. So it’s been on quite the (local) shopping spree of late.

Its existing operational footprint covers markets in South West Europe, Eastern Europe and Sub-Saharan Africa. So its attention here, on the Balkans, suggests it sees a chance to eke out profitable potential in more of Central Europe too.

Glovo said the transactions in Bosnia Herzegovina, Bulgaria, Croatia, Montenegro and Serbia are expected to close “within the next few weeks”, subject to fulfilment of closing conditions and relevant regulatory approvals.

While it said Romania will be completed following approval from the competition authority — but gave no timeline for that.

Its splurge on Central and Eastern European rival food delivery brands follows a $528M Series F funding round in April — so it’s evidently not short of VC cash to burn spend.

Commenting in a statement, Oscar Pierre, CEO and co-founder, said: “It’s always been central to our long-term strategy to focus on markets where we see clear opportunities to lead and where we can build a sustainable business. Central and Eastern Europe is a very important part of that plan. The region has really embraced on-demand delivery platforms and we’re very excited to be strengthening our presence and increasing our footprint in countries that continue to show enormous potential for growth.” 

In another supporting statement Delivery Hero made it clear it has bigger fish to fry (than can be served up to hungry customers in the Balkans) right now.

“Delivery Hero has built a clear leading business in the Balkan region in the last couple of years. However, with a lot of operational priorities on our plate, we believe Glovo would be better positioned to continue building an amazing experience for our customers in this region,” said Niklas Östberg, its CEO and co-founder.

A relevant, recent development for Delivery Hero‘s business is the decision to re-enter its home market of Germany — Europe’s biggest economy — under its foodpanda brand, starting in its home city of Berlin this summer (but with a national expansion planned to follow).

This is notable because back in 2018 it sold its German operations to another on-demand food delivery rival, the Dutch giant Takeaway.com — in a $1.1BN deal which included the Lieferheld, Pizza.de and foodora brands — temporarily stepping out of the competitive fray. (Meanwhile Takeaway.com has since merged with the UK’s Just Eat to become… Just Eat Takeaway so, uh, keep up.)

Delivery Hero is returning to Germany now because it can, and because the market is huge. A two-year non-compete clause between it and Just Eat Takeaway recently expired — allowing for reheating (rehashing?) of the competitive food delivery mix in German cities.

Speaking to the FT back in May about this market return, Östberg suggested Delivery Hero has girded itself (and its investors) for a long fight.

“We don’t see necessarily that we are going to go in and win the market in the next year or so. This is a 10-year game,” he said. “Of course we will definitely make sure we put in enough money to be the clear number two, the clear challenger [to Just Eat Takeaway.com].”

Winning at food delivery is certainly a(n expensive) marathon, not a sprint.

There are also of course multiple races being run in markets around the world, depending on local conditions and competitive mix — with the chance that the winner of the biggest and most lucrative races will reach such a position of VC-sponsored glory that it can buy up the top competitors from the smaller races and consolidate everything — maximizing economies of scale and gaining the ability to squeeze out fresh competition to grab a juicy profit for themselves.

Or, well, that’s the theory. Competition regulators are likely to take increasing interest in this space, for one thing. Rising awareness of gig economy workers rights is also putting pressure on the model.

For now, the thin-margin food delivery business needs the right base conditions to survive. The model only functions in cities and ideally in highly dense urban environments. Most of the players in this space also do not employ the armies of riders that are needed to make deliveries — because doing so would make the model far more costly. And in Europe political attention on gig economy workers rights could force reforms that raise regional operational costs, putting further pressure on margins.

Spain has its own labor reforms in train that will affect Glovo in its home market, for example.

Achieving sustainability (i.e. profitability without the need for ongoing VC funding injections) remains a huge hurdle for delivery apps. It will likely require massive market consolidation and/or convincing users to switch from making the occasional order of a hot meal on a weekend to relying on app-based delivery for far more of their local shopping needs — not just lunch/dinner but groceries and toiletries, and other fast moving consumers goods and household items.

It’s notable that super fast grocery delivery is a major focus for Glovo, for example — which has recently been building out networks of inner city dark stores to service in-app convenience store shopping.

Lots of other on-demand app players are also ramping up on that front. Including Delivery Hero — which has been paying more attention to groceries (picking up InstaShop last year in a deal worth $360M).

Glovo building out in Central Europe while exiting markets further afield suggests it believes it can use a concentrated market footprint to drive operational efficiencies and strong order margins through a tightly integrated meal delivery and dark store play.

If it can do that — and offer at least the whiff of profitability — it could make its business an attractive future acquisition target for a larger global giant that’s looking to up the ‘consolidation chicken’ stakes by bolting on new regions.

A larger player like Delivery Hero may even be a potential future suitor — having shown it’s happy to return to markets it left earlier. After all, it surely knows Glovo’s business pretty well since they’ve done a number of market swaps. But, for now, that’s pure speculation.

Zooming out, what the on-demand model of app-based urban convenience means for the future of urban environments is a whole other question — and one which both competition and urban regulators will need to ponder very carefully.

If the rush to scale delivery platforms drives unstoppable consolidation that sees smaller players gobbled up by a few global giants — that can then use their size and scale to outcompete local shops — it may spell even more dark times for the traditional High Street and its family-run bodegas which have already been hammered by Internet giants like Amazon.

Touch of a button convenience does carry wider costs.

 

#amazon, #apps, #balkans, #barcelona, #berlin, #bulgaria, #central-europe, #croatia, #delivery-hero, #eastern-europe, #europe, #food, #food-delivery, #foodpanda, #fundings-exits, #germany, #glovo, #just-eat-takeaway, #just-eat, #montenegro, #niklas-ostberg, #online-food-ordering, #oscar-pierre, #retailers, #romania, #take-out, #takeaway-com, #tc, #united-kingdom

‘Bowl food’ startup Poke House closes $24M Series B led by Eulero Capital to expand in Europe

The FoodTech industry is effectively now going into fast food. Sweetgreen in the US is a ‘fast-casual’ restaurant chain that serves healthy “bowl food”. It’s raised $478.6M. A similar firm is Sweetfin. Both employ a lot of tech in their back-end to improve efficiencies.

Into this area has come European startup Poke House, which is effectively industrializing the production of “poke bowls” for food delivery platforms. Poke House specializes in bowl food that often includes marinated fish that’s cubed and layered up with sticky rice, pickles, noodles, etc.

The company has now raised €20 million ($24m) in a Series B funding round led by Eulero Capital, with the backing of FG2 Capital and reinvestment from Milan Investment Partners SGR. It using tech and data to optimize the production and delivery of its product via all the major food delivery platforms such as Uber East etc. The Italy-born food tech startup claims to have built a “€100M+ company” inside two years.

Founded by Matteo Pichi and Vittoria Zanetti, Poke House has opened 30+ stores in Italy, Portugal and Spain, and now has 400 employees. It’s claiming an expected turnover of €40M+ in 2021.

With the funding, the startup will start opening new stores in existing markets, enter France and start in expansion in the UK.

Poke House says it uses a lot of tech on its back-end, tracking every element of the supply chain to optimize the business. It also analyzes data from third-party delivery platforms (ie. Deliveroo, Glovo, UberEats) to deliver a sub-10 mins food preparation time, and a delivery time under 25 mins.

Matteo Pichi, Co-Founder of Poke House said: “The pandemic has challenged our food sector, and we see technology as the way forward to innovate and digitalize the traditional restaurant experience. We are seeing a shift in people’s desires in fast but healthy food. Poke bowls fit this new need and it promotes a more balanced, active and sustainable lifestyle with quick and healthy food options available nearby.”

Speaking to TechCrunch, Pichi added: “Our competitors are the fast-growing healthy concepts such as Sweetgreen or Sweetfin in the US. But in the same time, we think we are lucky because we really are one of the first brands built 100% from food delivery experts or former employees. Our next competitors are gonna be full native virtual brands extremely strong in data analysis and digital brand building. We use food delivery platforms as media platforms and we invest heavier than competitors in the channel.”

Gianfranco Burei, Founding Partner of Eulero Capital said: “Poke House business model rides some of the main trends in the food sector (food-tech, healthy food, delivery, customization) and has all the characteristics and talents to position the company among the top players at European level. We are thrilled to be a partner of Poke House in an innovative and forward-looking project, in line with our investment strategy which is based on the search for companies included in the macro-trends that will characterize the economic, technological and social evolution of the coming years.”

#co-founder, #companies, #deliveroo, #distribution, #europe, #food, #food-delivery, #food-tech, #france, #healthy-food, #italy, #online-food-ordering, #partner, #poke, #portugal, #spain, #supply-chain, #sweetgreen, #tc, #uber, #uber-eats, #united-kingdom, #united-states

Tyltgo’s same-day delivery platform lets small businesses compete with Amazon

Tyltgo wants to make it easier for restaurants and small businesses to compete with same-day delivery services offered by the likes of Amazon and HelloFresh. The Canadian company, which recently raised CAD $2.3 million (USD $1.8 million) in a seed round, is akin to a white label Uber Eats, providing businesses an on-demand delivery platform under their own branding that connects them to gig economy couriers.

“I think about us as a post-purchase experience company,” co-founder and CEO Jaden Pereira told TechCrunch. “The recipient goes directly onto the merchant’s platform and places orders through them, so it feels like they’re interacting with the brand they purchased from throughout the entire experience. Our messages, notifications, tracking pages and delivery are all customized under the merchant’s brand name, but it’s powered by Tyltgo.”

The necessity of having products delivered during the pandemic’s shelter-in-place orders combined with the massive reach of e-commerce giants like Amazon has created a society that expects same-day deliveries. Tyltgo recognized the exclusionary nature of that reality on smaller businesses with less time and fewer resources, and contrived to remedy the situation with some innovative tech and gig economy couriers.

In July 2018, Pereira, 22, co-founded the company with fellow student and developer Aaron Paul while studying at the University of Waterloo. Pereira originally did deliveries himself as a side hustle, while building up a consumer-facing service on Shopify. In October 2019, Pereira and Paul shifted focus to B2B, identifying the real problem as merchants struggling to offer quality same-day delivery at an affordable price.

From December 2019 to December 2020, Tyltgo’s revenue grew 2000%, says Pereira. The company started 2020 with two staff members and ended with nine, including former head of Uber Eats Canada’s marketplace operations, Joe Rhew, and former director of engineering at Goldman Sachs-acquired fintech company Financeit, Adnan Ali.

Aided by funding from VC firm TI Platform Management, Y Combinator and angel investor Charles Songhurst, Tyltgo projects another 1500% revenue growth for 2021. The company’s goal is to expand its team, develop an API and app-based platform, and add 100 more merchants across Ontario.

Pereira said Tyltgo originally focused on florists, and occasionally pharmacies, but demand from the restaurant industry led to the company’s new target — meal kit deliveries.

Meal kit services that provide the culinarily challenged with perfectly portioned ingredients and cooking instructions were already gaining popularity in the before times. When the pandemic hit, services like HelloFresh and Blue Apron saw even more growth. As restaurants struggled to keep their businesses open, many started to get in on the action, delivering restaurant-quality meals with instructions for heating and serving.

The global meal kit delivery services market is expected to reach almost $20 billion by 2027, with heat-and-eat options taking a large share of that market. Tyltgo is counting on the success of this industry. It has already secured partnerships with restaurants like General Assembly Pizza and Crafty Ramen, as well as with more traditional meal kit delivery services from grocery stores and organic farms.

Pereira said working in the “quasi-perishable space” of flowers and meal kits is both a challenge and a differentiator for the company. Depending on the contents of the delivery, Tyltgo will determine its perishability window and make sure to match that window with a driver. It’s also got an advanced fleet management platform that assigns a number of deliveries to suit the size of a courier’s vehicle.

“In the earlier days, the hardest part was being able to match those perishability windows without causing damage to the products,” said Pereira. “We all know that in logistics, you have to account for traffic, weather conditions, all these other things, but you have an eight hour delivery window to get out 35 deliveries.”

Another challenge is ensuring the top quality service Tyltgo advertises while working in the gig economy. Selecting for reliable couriers has slowed the company down at points, but Tyltgo aims to grow capacity only if it can simultaneously maintain a low error threshold.

“We won’t bring on a merchant if we don’t think we have the capacity to handle their deliveries and meet those expectations,” said Pereira.

Whether or not Tyltgo’s meal kit focus will end up driving scalability in the long run, the platform itself has legs. Pereira’s goal is to see Tyltgo become a part of every post-purchase customer experience for all retail trade categories, and that includes expanding into customer service, branding and transactions on top of delivery.

“The main reason why we’re doing this is because a lot of these smaller, brick-and-mortar retailers don’t have the time and resources to be able to compete with the Amazons of the world,” said Pereira. “We want to be able to put that power in their hands.”

#amazon, #blue-apron, #canada, #companies, #courier, #gig-economy, #hellofresh, #meal-kit, #mobility, #online-food-ordering, #shopify, #tc, #uber, #uber-eats, #university-of-waterloo, #y-combinator

Private chef parties at home startup Yhangry raises $1.5M Seed from VC angels and Ollie Locke

There’s an “uber for everything” these days and now there are “Ubers for personal chefs”. Just take a look at PopTop or 100 Pleats for instance. Now in London, there is Yhangry (which brands itself as the appropriately shouty YHANGRY). This is a “private chef parties at home” website, and no doubt an app at some point. The startup has now raised a $1.5 million Seed round from a number of notable UK angels which also includes a few UK VCs for good measure, as well as ‘Made In Chelsea’ TV star Ollie Locke.

Founders Heinin Zhang and Siddhi Mittal created the startup before the pandemic, which lets people order a made-to-measure dinner party online. Although it trundled along until Covid, it had to pivot into virtual chef classes during lockdowns last year and this. The company is now poised to take advantage of London’s unlocking, which will see legal outdoor and indoor dining return.

The startup also speaks to the decentralization of experiences going on in the wake of the pandemic. In 2019 we were working out in gyms and going to restaurants. In 2021 we are working out at home and bringing the restaurant to us.

Normally booking private dinner parties involves a lot of hassle. The idea here is that Yhangry makes the whole affair as easy to order as an Uber Eats or Deliveroo.

Investors in the Seed round include Carmen Rico (Blossom Capital), Eileen Burbidge (Passion Capital), Orson Stadler (Antler) and Martin Mignot (Index Ventures), Made In Chelsea star Ollie Locke, plus fellow tech founders including Jack Tang (Urban), Adnan Ebrahim (MindLabs), Alex Fitzgerald (Cuckoo Internet), Georgina Kirby (Vinehealth) and Deepali Nangia (Alma Angels). Yhangry’s statement said all the investors are also keen customers. I bet they are.

Co-founder Mittal said in a statement: “By making private chef experiences more accessible and affordable, our customers regularly tell us they are finally able to catch up with friends at home… 70% of our customers have never had a private chef before and for them, the freedom and flexibility to curate their own evening is priceless.”

Yhangry now has 130 chefs on its books. Chefs have to pass a cooking trial and adhere to Covid rules. The funding will be used to double the size of the startup’s team.

The menus start at £17pp for six people. The price of the booking covers everything, including the cost of the fresh ingredients, but customers can add extras, such as wine etc. Since its launch in December 2019, the firm says it has served more than 7,000 Londoners.

Yhangry says it will enter key European markets, such as Paris, Berlin, Lisbon and Barcelona.

How will Yhangry survive post-Covid, with restaurants/bars opening up again?

Mittal said: “When restaurants were open between our launch and March 2020, we saw demand because people want to be able to spend time with their friends in a relaxed setting, and aren’t limited to the two-hour slot you get in a restaurant. Once places start to open up again, we believe Yhangry will follow this trend of at-home dining and socializing – not to mention for people who are not ready yet to go out to a busy pub or restaurant.”

#articles, #barcelona, #berlin, #chef, #co-founder, #companies, #deliveroo, #economy, #eileen-burbidge, #europe, #lisbon, #london, #martin-mignot, #online-food-ordering, #paris, #passion-capital, #restaurant, #startup-company, #tc, #uber, #uber-eats, #united-kingdom

Men’s health startup Manual raises $30M Series A from US and European investors

Men’s health and wellbeing startup Manual has raised a $30m Series A round from US-based Sonoma Brands and Waldencast, and Manual’s existing European investors Felix Capital and Cherry Ventures. FJ Labs and the GISEV Family Office also participated in the round. The cash will be used for product development and international expansion. Manual provides diagnostics, treatments and ongoing care and plans to expand across Europe, Asia and Latin America. The company has already expanded to Brazil.

Manual is competing with Numan (raised $13M), also from the UK (Manual launched a month earlier than them). In the US it is competing with Ro (raised $876.1M) and Hims (listed). All these brands tend to focus on issues like vitamins and erectile dysfunction, with the, often common refrain of, ‘normalizing’ the idea that men should look after themselves better, across a number of fronts and removing stigma’s around sexual health. It performs blood tests and other tests to analyze heart health, gut health, testosterone, sleep, energy, and immunity. They are pushing at a large market, as men historically avoid doctors.

Manual app

Manual app

George Pallis, CEO and Founder, previously led marketing at Wise and Deliveroo. In a statement he said: “We’ve been encouraged to see men of all ages increasingly turning to Manual to solve multiple health problems, with almost half of our customers seeking help for more than one issue. It’s clear that a health concern may have more than one cause, and we can provide customers with the ability to treat their health in a more holistic way. Using different treatments to understand and improve their wellbeing.”

Speaking to during an interview Pallis added: “We built our own teleconsultation product and have different applications for the blood test offering. When you get your results we will offer a clinician, we’ll walk you through all the data and the learnings. We offer tools where people can monitor their progress and have regular check-ins with our medical team.”

Antoine Nussenbaum, co-Founder and partner of Felix Capital, commented: “There is still much work to be done to remove the taboo when it comes to men looking after their wellbeing and talking openly about health concerns. But we’re starting to see a shift happen amongst consumers.”

Kevin Murphy, Managing Director of Sonoma Brands, commented: “Manual exists to empower men to take better care of themselves and to live fuller lives by doing so. George and his team have the clarity of vision and the skill to make Manual a leader in this exciting and important area.”

#antoine-nussenbaum, #articles, #asia, #brazil, #ceo, #cherry-ventures, #deliveroo, #energy, #europe, #felix-capital, #fj-labs, #health, #latin-america, #leader, #manual, #online-food-ordering, #tc, #united-kingdom, #united-states, #well-being

DoorDash amps its IPO range ahead of blockbuster IPO

DoorDash filed a fresh S-1/A, providing the market with a new price range for its impending IPO.

The American food delivery unicorn now expects to debut at $90 to $95 per share, up from a previous range of $75 to $85. That’s a bump of 20% on the low end and 12% on the upper end of its IPO range.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


DoorDash still anticipates 317,656,521 shares outstanding after its IPO, giving the company a new, non-diluted valuation range between $28.6 billion and $30.2 billion. On a fully-diluted basis, the company’s valuation rises to more than $35 billion.

For the on-demand giant, the upgrade is enormously positive news. Not only will its valuation stretch even further above its most recent private price — around $16 billion, set this summer — but DoorDash will also raise even more money than it previously anticipated. That war chest will be welcome when a vaccine becomes widely available and food consumption habits could shift.

DoorDash will raise as much as $3.135 billion in its IPO, according to the filing.

After mulling over the company’s updated valuation from its new SEC filing, I’ve decided that there are three things worth calling out and discussing. Let’s get into them.

It’s Friday, so to make our analysis as easy as possible I’ve broken it into discreet sections for your perusal. Let’s go!

A path to profitability is important

DoorDash’s most profitable quarters that we are aware of were its two most recent. During the June 30 quarter, the company saw positive net income of $23 million off revenues of $675 million. In the September 30 quarter, on the back of even more revenue growth, DoorDash lost a modest $42 million against $879 million in top line.

Those two quarters contrast with the first quarter of 2020 when DoorDash lost a far-greater $129 million against a far-smaller revenue result of $362 million, and Q4 2019 when the figures were a $134 million loss and revenues of just $298 million.

#doordash, #ecommerce, #food, #online-food-ordering, #startup-company, #tc, #the-exchange, #unicorn

Uber officially completes Postmates acquisition

Uber today announced the official completion of its Postmates acquisition deal, which it announced originally back in July. The all-stock deal, valued at around $2.65 billion at the time of its disclosure, sees Postmates join Uber, while continuing to operate as a separate service with its own branding and front-end – while some backend operations, including a shared pool of drivers, will merge.

Uber detailed some of its further thinking around the newly combined companies and what that will mean for the businesses they work with in a new blog post. The company posited the move as of benefit to the merchant population they work with, and alongside the official closure announced a new initiative to encourage and gather customer feedback on the merchant side.

They’re calling it a “regional listening exercise” to be run beginning next year, wherein they’ll work with local restaurant associations and chambers of commerce to hear concerns from local business owners in their own communities. This sounds similar in design to Uber’s prior efforts to focus on driver feedback from a couple of years ago in order to improve the way it works with that side of its double-sided marketplace.

Focusing on the needs of its merchant population is doubly important given the current global pandemic, which has seen Uber Eats emerge as even more of a key infrastructure component in the food service and grocery industries as people seek more delivery options in order to better comply with stay-at-home orders and other public safety recommendations.

#apps, #california, #companies, #driver, #food-service, #ma, #online-food-ordering, #postmates, #tc, #uber, #websites

How COVID-19 accelerated DoorDash’s business

DoorDash filed to go public today, publishing numbers that showed rapid growth, enhanced profitability and an improving cash flow record which helped explain how the company had grown to a $16 billion valuation while private. The unicorn’s impending liquidity event will enrich a host of venture capital firms that bet on its eventual maturity.


Instead of posting this entry of The Exchange on Monday, we’ve put it out today for your Friday and weekend reading. Enjoy! — Alex and Walter


But notable in DoorDash’s impressive results is the impact of COVID-19, accelerating secular trends already in place, and boosting the unicorn’s growth. Before we get into pricing this IPO and guessing what the company might be worth, let’s strive to understand what portion of its 2020 business gains could stem from the pandemic — and might not persist into the future.

We’re not being pessimistic; we merely want to better understand the company. And DoorDash agrees with our general thrust, writing in its S-1 filing that “58% of all adults and 70% of millennials say that they are more likely to have restaurant food delivered than they were two years ago,” adding that it believes “the COVID-19 pandemic has further accelerated these trends.”

Even more, elsewhere in its filings DoorDash states plainly that COVD-19 led it to experience “a significant increase in revenue, Total Orders, and Marketplace [gross order volume] due to increased consumer demand for delivery, more merchants using our platform to facilitate both delivery and take-out, and improved efficiency of our local logistics platform.” The company then went on to warn investors that the “circumstances that have accelerated the growth of our business stemming from the effects of the COVID-19 pandemic may not continue in the future, and we expect the growth rates in revenue, Total Orders, and Marketplace [gross order volume] to decline in future periods.”

We’re not idly speculating.

Let’s observe how DoorDash’s growth accelerated from 2019 through 2020 and then peek at how the company’s economics improved during the same period, giving the company a shot at adjusted profitability for the full year, a nearly unheard of result in the on-demand market.

Growth

DoorDash generates revenue when a customer orders food via its service, splitting the total bill of food costs, taxes, fees and tips, distributing them to itself, the merchant creating the goods and the delivery person.

In an “illustrative” example that DoorDash notes its 2019 “approximate average per-order information,” the split works out as follows:

  • Bill: $32.90
  • Merchant: $20.10, or 61%
  • DoorDash: $4.90, or 15%
  • Delivery person: $7.90, or 24%

Given that the company is giving us old data and DoorDash’s performance has been stellar this year in terms of generating more gross profit, I wonder what has happened amidst 2020’s upheaval. But, the old numbers do for what we need, which is to understand the link between gross order volume (GOV) and DoorDash revenue. When the former goes up, the latter goes up.

So, as orders rise:

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