On-demand grocery delivery, which really came into its own with the emergence of the Covid-19 pandemic, continues to command huge attention from investors. The jury is still out on how people will use those services in the longer term, but in the meantime, the most ambitious of the startups in the field are raising big.
In the latest development, Flink — a Berlin-based on-demand “instant” grocery delivery service built around self-operated dark stores and a smaller assortment (2,400 items) that it says it will deliver in 10 minutes or less — has raised $240 million to expand its business into more cities, and more countries, on the heels of strong demand.
Flink — which means “quick” in German — is currently active in 24 cities across Germany, France and the Netherlands. It hasn’t disclosed how many active customers it has, but it targets younger consumers, those with small fridges, those who have forgotten items in their bigger shops, and people who simply don’t want to or can’t shop in the old-style of once every one or two weeks. Flink says it’s currently on a pace of activating operations in a new area every two days, it said.
“We are on a mission to give people back some of their valuable time during their hectic days and impress them with our service every time they order,” said Flink CEO Oliver Merkel — who co-founded the company with Julian Dames and Christoph Cordes — in a statement. “We want to establish Flink as the top destination for their day-to-day goods at great prices and with instant delivery by our amazing riders. The order growth we have seen over the past weeks has been explosive and we attribute that to the excellent service we are providing to our consumers.”
The size of this all-equity Series A is extraordinary considering that the company only launched in December last year. The company is not disclosing its valuation but one person close to the company said it’s “not a unicorn yet.” (Not worth $1 billion on paper, that is.)
The round is being co-led by Prosus, BOND, and Mubadala Capital; and it comes with a very interesting deal attached.
REWE — a German supermarket giant — has inked a strategic partnership with the company that will make Flink its preferred partner for smaller shopping grabs, which looks like it will complement the work that REWE is doing to build out its own grocery delivery businesses for bigger baskets. It’s not clear if REWE is actually investing.
This latest investment comes on the heels of Flink announcing, back in March when it was only three months old, a $52 million round from Target Global and earlier backers Northzone, Cherry Ventures and TriplePoint Capital, along with Cristina Stenbeck from Kinnevik, who invested in a personal capacity.
The opportunity for a new startup to get into the market for food — and in this case specifically grocery — delivery, is an interesting one at the moment.
On one hand, we’ve been through a year where many cities across Europe have been under shelter-in-place orders, pushing many more people to turn on online food ordering to get essential things delivered to their doors.
That is to say, demand — at least under current circumstances — has been more than proven out, with many of the biggest providers completely buckling under pressure with crashing sites, very few or no delivery slots available and many items out of stock on a too-regular basis.
“Flink is a pioneer in a new model of commerce that is purpose-built for consumers who expect better, faster, cheaper services,” added Daegwon Chae, general partner at BOND. “We have been impressed by Flink’s ability to scale rapidly while delighting customers through a seamless experience, and are excited to partner together as Flink builds the grocery store of the future.”
“Flink is the rare combination of a great founding team tackling a huge market with a truly disruptive proposition. The grocery retail market in Germany is one of the largest undigitized markets at only 3% online penetration. We believe that the grocery store of the future will be hyper-local, instantly available, and always delighting its customers. With best-in-class operations and strong momentum, Flink can become a major player in the digital grocery sector, and we look forward to partnering with them on the journey,” said Amer Alaily at Mubadala Capital, in a statement.