Instant grocery startups emerged and grew like weeds during COVID-19, fueled by consumers who chose to social distancing and ready to order their food and sundries with an app, and VCs seeing a gap in the delivery market that was yet to come. had to be completed definitively. Now, perhaps inevitably, comes the consolidation. In the latest development, Considerable — one of the major instant delivery players from Germany, backed by DoorDash in the US — takes over cajoo, a major direct delivery startup in France. In addition, Flink is raising a separate, new investment from one of Cajoo’s largest investors, the supermarket giant Carrefour.
Cajoo will be rebranded as Flink in the second quarter of this year; and according to Flink, the combined company will overtake Getir as France’s largest instant supermarket in terms of reach and sales, covering Paris and eight other cities with 30 hubs, totaling a potential footprint of 6 million customers. Cajoo currently has 400,000 customers in France.
The financial terms of the deal and investment are not officially disclosed, but sources close to the companies tell us that Flink paid between €90 million and €100 million for Cajoo, and that the Carrefour investment is about €60 million to €70 million. million amounts to . We’ve heard the latter is an equity investment and Flink values at $5 billion (€4.8 billion) post-money – Flink doesn’t comment on that number (we asked).
“Cajoo has done an amazing job leading the rapid trade revolution in France and building a loyal customer base,” said Oliver Merkel, co-founder of Flink, in a statement. “We are pleased to join forces under the Flink brand to create the No. 1 fast commerce player in France. At the same time, we feel privileged to enter into an exclusive partnership with Carrefour to offer the best range at competitive prices to our customers.”
The $5 billion figure is a big increase from Flink’s most recent valuation — which was $2.85 billion when it raised $750 million in the round led by DoorDash in December 2021. That’s a sign that despite all that, the talk about the market cooling off for growth stage startups, there are still some pockets where that is not the case. Part of the story here seems to be about investors consolidating around a smaller group of players, but also the players themselves proving their worth through numbers. Flink says it currently operates at an ARR of $500 million and its revenue is currently growing at double digits week-on-week, although it doesn’t reveal any actual sales figures.
As we reported before, Flink and Cajoo — itself a brand new company, one of the COVID babies in space, launched only last year – have been in an M&A dance since last fall, one of the many deals floating around the intoxicating European market. (Others who have connected include: Buy Gorillas Frichti In France; Gopuff buys Dija and Fancy† Getir buys Blok.) Initially it was a negotiation that didn’t progress and instead led to Cajoo raise $40 million from Carrefour and others.
However, instant supermarkets – like other delivery companies – are very capital intensive and it looked like Cajoo might need to increase or sell again. Given the broader market conditions, it may have been very difficult to do the former at this point.
From what we understand, while others were also interested in the startup, Flink came out on top, in part because of synergies between the two companies: One of Flink’s major backers is also a supermarket chain, REWE, and both startups have expanded sourcing. and other functions that rely on the scale of their strategic backers.
“Cajoo’s story was amazing,” Cajoo CEO Henri Capoul said in a statement with seemingly little irony given the company’s young age. “I am very proud of the whole team, for the value we have created together for our customers over the past 15 months. We are pleased to find such great partners with the Flink team with whom we share common values, a similar vision of how to drive customer satisfaction and how to build a loyal customer base for sustainable growth for years to come. I am very happy to see how the French tech ecosystem is building great companies, attractive to the best EU companies, as today’s news shows that we are being acquired by the fastest growing company in the European market.”
For the major supermarket chains, investing in smaller startups that build the technology and business case behind instant delivery is not a bad move: instead of trying to compete on an unknown basis, it means testing the waters for these new business models and tapping into new demographics and consumer habits with relatively little impact on/disruption to their current operations. And this is a small change for a giant like Carrefour, which operates 13,000 stores in 40 countries, with gross sales of €81.2 billion in 2021.
“Not even a year after joining forces with Cajoo, we are able to participate in the market consolidation and forge a valuable strategic partnership with Flink. As a leader in home delivery in Europe, we are excited to amplify our e-commerce ambition and bring unprecedented value to Carrefour and Flink customers,” said Elodie Perthuisot, chief e-commerce, digital transformation and data officer at Carrefour.
Nevertheless, France — where supermarket chains have been relatively late to the delivery game and where in-person shopping in outdoor markets remains part of the country’s cultural fabric — is interesting to watch when looking at long-term viability and instant traction. – delivery startups.
It will also be interesting to see how and if Flink comes to the UK, one of the biggest markets in Europe, where it hasn’t established a foothold to date.