Getir delivery scooters that can be seen parked along the streets of central London.
Petra Figueroa | SOPA Images | Light Rocket via Getty Images
London — Supported by the acceleration of online commerce during the coronavirus pandemic with venture capitalists, European start-ups are proposing to deliver people’s groceries in just 10 minutes.
Getir in Turkey, Gorillas in Germany, and Dija in the UK are just a few of the apps that promise users 10 minutes of grocery delivery. It is an increasingly crowded market and many new entrants are trying to build a strong foothold in the local market.
“The acceleration of the grocery space has been so great that it’s in line with what’s happening in the pandemic,” Dija co-founder and CEO Alberto Menolascina told CNBC in an interview.
Dija, which operates in London, Paris and Madrid, raised $ 20 million in seed funding in December. Menolascina, a former employee of Deliveroo, founded the company with her colleague Yusuf Saban. Both Getir and Gorillas entered the British capital earlier this year.
These companies operate a fulfillment center called the “Dark Store”, which is designed to fulfill online orders rather than serving customers directly. Dija and Gorillas hire courier companies rather than relying on contractors like Deliveroo and other players in the gig economy.
Venture capital investors are rushing to start up fast delivery. According to PitchBook, venture-backed grocery companies have raised about $ 1.56 billion in Europe so far this year, easily surpassing the $ 678 million that flowed into the sector in 2020.
And trading is becoming more and more competitive.by Bloomberg, Getir and Gorillas both want at least $ 500 million in investment rounds, worth $ 7 billion and $ 6 billion, respectively.
The gorilla refused to comment on Bloomberg’s report. Getir wasn’t immediately available at the time of publication.
It’s not hard to understand why investors are flocking to the bright red grocery market.Food delivery app like Uber Eats, Door dash And Deliveroo I’m making a big bet on online grocery shopping. Their business thrived because the coronavirus restrictions allowed people to spend more time at home.
According to app analytics firm AppRadar, traditional supermarkets remain the main players in online grocery stores in the UK, adding a significant number of users to the pandemic. Tesco Is the most downloaded grocery app on the Google Play store and has added 1.2 million users since March 2020.On the other hand, Asda Walmart Last year’s $ 8.8 billion transaction was far behind, adding 964,000.
But start-ups are starting to catch up. According to App Radar, Gorillas has accumulated 112,000 downloads on Google Play since its launch in March last year.
“At this point, purely in numbers, these startups are clearly far behind established players such as: Amazon Thomas Kriebernegg, CEO and co-founder of AppRadar, told CNBC: “But what you have to do will change quickly.”
Kriebernegg said grocery delivery is a “hyperlocal problem” and requires investment in certain areas. He added that as some of the start-ups grow in size, space may be ripe for integration. Amazon A major retailer among potential acquirers. Amazon is already active in this area and launched its own online grocery brand called Amazon Fresh in 2017.
Another U.S. company, Softbank-backed start-up Gopuff Equivalent to $ 8.9 billion Earlier this year, it signed a $ 1.15 billion funding deal, giving enough funding for potential acquisitions and Instacart Raised $ 265 Million With a whopping $ 39 billion valuation.
Investors believe that these start-ups will thrive long after the pandemic. However, some retail executives and professionals are skeptical of the rise of fast grocery delivery apps.
Alex Harvey, Advanced Technology Officer at Ocado, a pioneer of online grocery stores in the United Kingdom, said Told the insider Last month he said he didn’t think start-ups would pose a long-term competitive risk to his business.
Fujitsu’s retail industry consulting leader, Jat Sahi, told CNBC that the position of a grocery starter “doesn’t seem to be very defensive.”
“This is a convenient service and will grow rapidly,” Sahi said in an email. “But how do you distinguish one from the other? If you can’t, you will never make much profit or profit.”
“Prices are really important, and it can take a long time for these guys to get the scale to get prices for Tesco, Sainsbury, Asda, etc., especially if they are opening up markets among them. Let’s do it, “he added. “Technology and consumer trends make this easy to do, but difficult to differentiate and profitable.”
Sahi added that the dark store “probably won’t work for these startups.” Dark kitchen, “Restaurant facilities designed to serve online customers directly.” Because the products in the store are equivalent, while the food in the restaurant is not. “
The imminent resumption of the economy after a long blockade can also hinder the growth of fast-growing delivery platforms.inside that Latest Q1 Trading InformationDeliveroo recently warned that “we expect growth to slow as the blockade is eased.” Deliveroo’s share price has fallen 36% since its unfortunate IPO in March.
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