JOKR is the latest speedy grocery delivery startup to have raised a nine-figure round of funding. The company announced today that it has raised a $170 million a Series A round led by GGV Capital, Balderton Capital and Tiger Global Management. Activant Capital, Greycrot, FJ Labs, Kaszek, Monashees and HV Capital also participated.
Like other startups in the space, JOKR operates a network of small, delivery-only grocery stores that carry a limited number of items and have a small delivery radius. With this model, JOKR can tailor inventory to a specific neighborhood, sell local products (i.e., bakery goods), and deliver within 10 to 15 minutes of the customer placing an order.
JOKR’s big fundraise comes just three months after it started operations and a month and half after it launched its grocery delivery services in New York City. According to a press announcement sent to The Spoon, JOKR said that since it started operations it has opened up a new hub roughly every day and now operates 10 hubs in New York, and 100 hubs across nine cities including São Paolo, Brazil; Mexico City, Mexico; Bogota, Colombia; Lima, Peru; Warsaw, Poland; and Vienna, Austria.
Of course, JOKR isn’t the only speedy grocery delivery service bringing in big funding. In fact, it would be odd if JOKR hadn’t raised more than $100 million. Gopuff raised $1.5 billion in March to grow its delivery service. Last month Germany’s Flink raised $240 million, and Turkey’s Getir raised $550 million (after raising $300 million in March). Germany-based Gorillas raised $290 million in March, launched its own U.S. operations in NYC at the end of May, and is already expanding to San Francisco, Los Angeles and Chicago.
Vitaly Alexandrov, CEO of the San Francisco-based Food Rocket speedy grocery service, recently told me that in order for his business to work, one hub needs to be able to service 50,000 households. That means that at some point not too far off, all of these services are going to be vying for the same markets. Alexandrov said that eventually 10-minute grocery delivery will become a commodity, which is why Food Rocket is looking to differentiate itself with ready to eat meals, ghost kitchens and will eventually open up its logistics and delivery platform to other retailers. Gopuff too, is diversifying by getting into the ghost kitchen business as well.
Despite all this funding, we don’t yet know if or how consumers will take to this new, utility-style model of grocery shopping. Many of these services don’t have order minimums or delivery fees, but will that be sustainable as they scale? Will consumers place large enough orders to keep these businesses going or will these services burn out a la Kozmo.com?
We’ll learn the answers to these questions over the coming months but one thing we know already: Most of these startups won’t fail because of a lack of funding.
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