In Europe, Funding Pours In For Online Grocery Platforms

As the COVID-19 pandemic continues to put lives at risk around the world, consumers are becoming increasingly accustomed to technologies that offer COVID-safe alternatives for potentially dangerous activities — and demand is only growing for such solutions. In Europe, where the vaccine rollout is progressing far more slowly than in the States, funds are streaming in for online platforms that offer remote, low-contact alternatives to traditional grocery shopping.

For example, Rohlik, a Czech Republic-based online grocery platform, just raised €190 million (US$228 million) in its most recent funding round to expand further into Europe. Additionally, the company announced 101 percent year-over-year growth in 2020, amounting to €300 million (US$361 million) in revenue. Rohlik will use the latest fundraise for its expansion into Germany and to grow its reach in the countries it already serves — the Czech Republic, Hungary and Austria. The platform, which describes itself as the “leader of eGrocery in Central Europe,” touts its selection of 17,000 products and its two-hour delivery as factors that set it apart from competitors, both digital and brick-and-mortar.

Omri Benayoun, General Partner at lead investor Partech, commented in Rholik’s news release, “Rohlik is the most exciting player in the European online grocery industry…Rohlik’s execution expertise has earned it the trust of both local merchants and global FMCG companies, allowing Rohlik to outperform on quality and price compared to the grocery giants.”

The title “most exciting player” is no small accolade, as more online grocery solutions come to the fore across the continent. Crisp, a Dutch mobile-only online grocer, just raised €30 million (US$36 million) in Series B funding to grow its vehicle fleet, its inventory and its base, reports FinSMEs. Crisp positions itself as a locally-oriented online grocer, emphasizing its partnerships with area farmers, bakers, and other food producers.

“Our growth is about building a healthy company,” Tom Peeters, Crisp’s CEO and co-founder, said in a statement excerpted in EU-Startups. “Healthy in terms of our offering, which puts fresh and in-season food first, and healthy in the sense of operating responsibly. Our dreams are big when it comes to developing smart and sustainable technology.”

“The way we buy our food has not changed a lot since the 1950s, creating inefficiencies in quality, affordability, and convenience,” added BaoY van Cong, investment director at round leader Target Global. “Crisp reflects the changing relationship that consumers today have with food: the European market for grocery shopping is starting to move online rapidly, super-accelerated by the pandemic… I firmly believe that the rise of food and groceries shifting to online is here to stay.”

While big investors are boosting the online grocery industry by the millions in the European Union, consumers are contributing their own funds in the United Kingdom. Delivery app Grocemania, which boasts under-an-hour deliveries, just reached its target of £100 thousand (US$139 thousand) in crowdfunding, reports The Grocer. Like Instacart, Grocemania delivers from existing supermarkets, rather than offering its own selection of groceries. The fundraise came from Seedrs, a London-based crowdfunding platform for startups, and comes on the heels of a 2019 raise of £80,000 (US$112 thousand). The app, which currently serves London, Brighton, Nottingham and Bristol, will use the funds to promote its upcoming launch into Birmingham, Manchester, Liverpool, Leeds and Oxford.

“As we unlock new revenue streams, the business will be able to lower the pricing for our delivery product for the end-users,” founder and director of digital marketing Askar Bulegenov told The Grocer. “We are…ready to demonstrate a lot of improvements and USPs for both customers and businesses in the next six months.”

Some might question the logic of investing in these services right as consumers are being vaccinated and regaining their pre-pandemic comfort levels with brick-and-mortar retail. However, there is reason to believe that consumers will continue to integrate digital technologies into their grocery shopping routines in years to come. PYMNTS researchers found in our Omnichannel Grocery Report, created in partnership with ACI Worldwide, that 64 percent of consumers buy at least some of their groceries online, and 23 percent of grocery shoppers are ordering groceries online to be delivered at home more than they were before the pandemic began.

As Debbie Guerra, executive vice president of merchant payments and payments intelligence solutions at ACI, told PYMNTS in an interview, “Let’s get real — grocery shopping has gone digital, and it has really accelerated … as a result of the pandemic … I think we’re going to see consumer journeys across omnichannel shopping experiences continue in the future.”

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