That was the salad days of fresh food delivery startups. But those that stuck with it and built businesses that are making money are still here and want to grow even more. One of these companies, the Czech food delivery service Rohlik, announced on Friday that it would be getting an extra $170 million.
Rohlik, whose name comes from the Czech word for “baker” or “little roll that a baker might make,” has tried to stand out. Its main goal has been to run smaller stores and build relationships with local sellers and producers, like butchers and fishmongers, instead of copying what a big supermarket might sell online (or even in a store). In honor of the Rohlik that gives it its name, it bakes bread at its delivery centers.
He told TechCrunch, “To replace Rohlik you would have to do five different shops.” Tomáš Čupr is the CEO and founder of Rohlik. The service ships about 17,000 SKUs within one to two hours of an order being placed.
He said that in 2023, it had 800,000 users. With the new money, the plan is to spread its model to more places in Europe. The goal is to open in 10 more cities over the next six years.
It wants to speed up its technology, which includes logistics and analytics software as well as robots for sorting and picking. It plans to do this by licensing it to other delivery companies so they can use it to build their own local networks and delivery operations that are similar to the ones Rohlik has already set up. This year, Upr said it would start its tech platform licensing program.
The European Bank for Reconstruction and Development (EBRD) is the main investor in Rohlik’s latest round. Sofina, Index Ventures, Quadrille, and TCF Capital, which have all backed the company before, are also taking part, as well as the European Investment Bank (EIB) through its Scale-Up Initiative. As per Čupr, the EIB part is debt, and they called it a “minority” of the whole amount.
Upr wouldn’t say how much the round was worth, but we think it was higher than earlier estimates but not as high as $2 billion. To give you some background, Rohlik’s last big round of funding was in 2022, and the company was valued around $1.3B before the money was given. Now that debt and equity have been raised, the company has close to $800M.
The grocery delivery business is having a hard time right now, so this new round of cash is very welcome. During the height of the COVID-19 pandemic, delivery services got a lot of attention, money, and use. As a result, hundreds of millions of dollars were poured into different versions of the business model, especially those that looked really new, like “instant” delivery startups. The investment company AgFunder says that nearly $19B was put into grocery delivery startups just in 2021.
It may have been inevitable, but after the peak came the trough. A lot of transportation startups went out of business or were bought for very little money, and there were a lot of layoffs, budget cuts, and reorganizations.
Getir used to be a big player, but now it’s focused on its home market of Turkey after years of aggressive funding and growth. While its US peer GoPuff is said to have spent $400M last year. Not just the most obvious instant players are giving up either. Oda, a big grocery store chain in Norway that has also rapidly grown and bought other companies, has been letting people go in waves and reducing its reach.
Many people think of Ocado as the best food delivery service, but it has been having a hard time with lower earnings, and partners have had to put on hold their Ocado-powered warehouse projects.
Because of all the chaos, Rohlik is both feeling the pressure and showing signs of where it might build defenses as it closely watches what other people do. “I know Ocado well,” he said. “Our CFO used to work for Ocado.”
Besides the Czech Republic, the company, which Čupr calls “20 years in the making,” also works in Austria, Germany (as shown above under the name Knuspr), Hungary, and Romania. The parts of its business that are in its home market, Hungary, and Munich are now all making money. Rohlik said that since COVID-19, sales have been growing by an average of 40% per year.
The new business wants to make €1B in sales and have positive cash flow by the end of 2024. We can’t say for sure if Rohlik is taking on too much because it doesn’t say how much money it makes right now.
Also Read: Amazon Starts a New Service in the Us That Delivers Groceries
“Since the beginning of our partnership with Rohlik three years ago, we have been continually impressed by the management team’s execution and investment in proprietary technology, automation, and the growing use of artificial intelligence across all of its operations,” said Tamas Nagy, Director, co-head of equity investments at the EBRD. “We’re proud to back Rohlik’s plans for future growth and expansion.”
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