The days of the salad are over for many startups in the online food delivery industry. After a long period of cash injections, splashy and high-profile promotions and interesting experiments playing with cutting-edge technology, these days layoffs, mergers and acquisitions and falling valuations are all too often the stories you are most likely to hear about. of them. Today, however, comes an interesting exception: Rohlika Prague-based online grocery delivery startup with approximately 1 million customers, announces that it has raised 220 million euros ($231 million at current rates), money it will use to continue investing in its current markets and its growth.
It is a Series D and it is led by a new backer, Sofina, with previous investors – Index Ventures and Founder/CEO Tomáš Čupr are both named – participating as well.
The investment comes at a difficult time for the sector. Other big European players Getir and Gorillas have made staff redundant; Deliveroo confirmed to us that they had frozen hiring; and others consolidate with bigger rivals as their leads dwindle. Rohlik pointedly noted with his announcement today that this Series D, which is taking place during a “turbulent” time, is coming in at a higher valuation than his Series C.
However, he declined to give a specific number, so it could mean anything. When Rohlik last raised money — $119 million almost exactly a year ago — it was valued at €1 billion, which was $1.2 billion at the time, but that figure is now closer to $1 billion given the fall in the euro against the dollar at the time.
Rohlik also noted that revenues were 500 million euros in 2021 (but declined to give current revenue figures), and that it was profitable in the markets where it operates in Hungary and the Czech Republic, respectively. since 2021 and 2018.
“Series D in this tough market is a great achievement for Rohlik and the whole team. Without our great people, we wouldn’t be in this position. This increase gives us a chance to emerge as a class winner in the next few years and I am excited about what lies ahead,” Čupr said in a statement.
On-demand food delivery has seen a wave of hype over the past couple of years, with the many different permutations of the model – “instant” delivery, hot takeout from restaurants, hot takeout from cloud kitchens, groceries, alcohol and non-essentials, autonomous delivery robots, etc., etc. – activated by bags of money from investors; a strategy between many players to flood the market in order to develop their delivery networks and reach out to more consumers through discount promotions; and of course a global health pandemic that has led many people to stay away from physical places for their dietary needs.
All of this has taken a very awkward downgrade over the past few months, driven by inflation and a very bearish stock market, which has criticized all publicly traded online grocery players and put pressure cascading over the rest of the sector. In this context, this round seems to indicate that there is still a thesis going where investors believe that a handful of companies will emerge from the broader field as winners.
Difficult time of truth: The winners may be those who perform the best, but there is also an argument to be made that it will just be those who have been exploited the most. In other words, those who have attracted the most investment stand to suffer the biggest losses if they do not succeed. (Rohlik has now raised more than half a billion euros, or more than $500 million.)
Again, Rohlik did not disclose any numbers on its growth over the past year, or its current earnings, in its press release; but it notes that its 90-minute turnaround time from order to door, with 15-minute time slots for reservation, now covers 17,000 items.
As we wrote before, Rohlik has a few distinctive details about its own approach in addition to its own focus on delivery times. Namely, it has taken over the production of many of the items it sells, such as baked goods; and it also has a mission to work closely with local shops and small producers, so these should be taken into account in the unit economy of its model. In fact, fresh produce makes up around 40% of its sales, which is above the average for grocery delivery companies and seems to be a pride for the company: perishables can be very difficult to obtain, so the fact that Rohlik sells them, and people buy them with confidence, says something.
The company is similar to Ocado in the UK in that it has taken a very methodical approach to growth. For its part, Ocado has not chosen to take Europe by storm, for example, but exports its technology to a number of partners around the world. Rohlik’s method mostly seems to be slow growing. It is now active in Prague, Budapest, Vienna, Munich, Frankfurt and soon Hamburg, Milan, Bucharest and Madrid, but no nationwide blitz seems to be in sight.
“This investment is part of Sofina’s strategy in the consumer and retail sector to provide capital to support growth opportunities alongside partners who share common values and a vision to bring efficiency , choice and convenience in food retailing to new levels,” Sofina CEO Harold Boël said in a statement. “We look forward to working with Rohlik, leveraging our decades of investment in the industry, as we believe its focus on local sourcing and assortment will position it well to capture a significant share of online grocery shopping, considering consumers’ turn to sustainability.
“We are very encouraged by the continued strong but sustainable growth of Rohlik, which has now achieved profitability in two key markets,” added Jan Hammer, Partner at Index Ventures. “This latest round of funding will allow the company to capitalize on the opportunity it faces as it doubles its investment in technology, accelerates its expansion and solidifies its market leadership.”