Grocery delivery company JOKR doubles against Brazil as it secures $50 million at a $1.3 billion valuation TechCrunch
After a challenge several months included closed marketinstant grocery delivery company JOKR tells TechCrunch it has raised $50 million in a Series C investment at a post-funding valuation of $1.3 billion.
The cost First report information that JOKR was looking for last September, following a $260 million increase announced in November 2021. At the valuation, however, the company is up slightly, up from its pre-funding valuation of $1.2 billion from Series B.
“It’s not a huge appeal in terms of valuation, and clearly something that, despite the market correction, still remains,” said Ralf Wenzel, co-founder and CEO of JOKR. showed that we were able to generate traction to grow and become more profitable.” TechCrunch. “Otherwise those terms would be unjustified. We’re glad we’ve closed the Series C round and it’s getting a higher valuation from new and existing investors.”
The new investment was driven by existing investors, with G Squared leading the round and GGV Capital, Tiger Global Management and HV Capital participating. In total, JOKR has raised $480 million since it was founded in 2021.
Difficult decisions
Wenzel pursues new funding “to ensure that we have a fully funded business plan and that we can become fully self-sustainable and not rely more on external funding. “
It has really been a roller coaster ride for the company over the last year. In my report, Information says that JOKR is losing 10 million dollars per month. Wenzel confirmed the company is “still losing money,” but that number includes countries and cities where the company no longer operates, so the loss has now narrowed to a single multi-million dollar figure. every month.
JOKR reach gross profit status in April last year, but caught up in the challenging economic environment that has affected the immediate grocery delivery sector, in part stemming from the direct return of people to grocery shopping during the pandemic. pandemic eases, venture capital investment slows, and war in Ukraine.
As a result, in the early summer of 2022, the company cited “global economic uncertainty” as the reason for announcing that it would Closed delivery in New York and Boston. Then this month, it Officially leaving Colombia after before closed location in Medellin and Santiago, Chile in November. The company continues to operate in Brazil, Mexico and Peru.
JOKR’s Instant Grocery Delivery App. Image credits: JOKR
The decisions, Wenzel said, stem from an ongoing assessment of its various business units and determining where JOKR has the best chance of balancing growth and profitability.
“It’s not about ‘winners taking over the whole market,’ it’s more like ‘winners taking over most of the market,'” he added.
When asked how he can be optimistic about the future of JOKR when the immediate grocery delivery sector is more widely challenged right now, Wenzel said it leads to a distinct balance between long-term growth and short-term profitability as well as the company’s focus on profitability by geographic region. spread.
“We have therefore decided to focus exclusively on geographies that align with these expectations and are on a clear path to profitability, without compromising our vision and customer promise. our customers or sacrifice huge long-term growth potential in one of the lowest penetration regions in the world,” he said.
Additionally, JOKR focuses on customer experience, which is why, he says, the company always has a Net Advertising Score above 80.
He added: “We truly believe that e-commerce needs to meet the growing needs of our customers for relevance, reliability, sustainability and fun. “JOKR is focused on building a new generation of retail, through vertical integration and cutting-edge data science and technology. We achieved full operating leverage with a positive gross margin within just one year and have continued to grow since.”
Unbaging instant grocery delivery
The instant grocery delivery sector is at its peak during a global pandemic as fewer people leave their homes. Startups have popped up in droves and attracted some serious venture capital.
However, as the virus became something we all had to learn to live with, people went back to their normal in-person grocery shopping behavior. This makes most of the fast commerce sector find out if their business model can survive in a crowded space, just as capital becomes scarce.
“Some [delivery startups] definitely the safest — especially those with a positive economic unit,” said Matt Birnbaum, former head of talent acquisition at Instacart and now a talent partner at Pear VC, told my colleague Kyle Wiggers in June. “Good delivery companies can slow their spending in growth areas like recruiting and marketing and reap profits almost immediately. The companies most at risk are those with no clear roadmap to profitability in the short or medium term. As access to capital becomes more limited, so does the desire to grow at all costs.
Unfortunately, the result has been announcements of companies buckling against the strain and being acquired or closed in the past year. For example, Buyk, the refrigerator is no more And Zero Grocery Store shut down — with Zero doing so just a few weeks later announced a new funding round. We also see some giants, like gopuffAnnounced layoffs, as done Zapp.
Meanwhile, my colleague Ingrid Lunden reported on Turkey-based Getir acquires German competitor GorillasWas “explore strategic options” since May and has laid off staff. This is after Getir himself announced plans to cut 14% of the global workforce and slow expansion plans.
Delivery to Brazil
Faced with layoffs and market closures, Wenzel said continued investor confidence is proof that JOKR is on track today and tomorrow. The Series C round closes in December.
Meanwhile, Wenzel said the business in Brazil “has been strong, growing steadily and earning more profits”. Brazil accounts for 50% of JOKR’s business, and the new funding will allow the company to double down on operations in this region while it strategically looks into other geographies. He added that the company has a positive gross margin in Brazil and expects JOKR to reach full profitability in the first quarter of 2024.
Brazil is one Large market for on-demand grocery delivery. It has grown an average of 32% annually since 2019 and together, the market has generated an estimated $3.1 billion in revenue by 2022. The market is expected to grow around 10% per year. years until 2027, which would effectively double the market, according to Ken Research.
The market also has some fierce competition. Some of the major players serving the country include iFood, Rappi and Mercado Libre. Uber Eats was on that list until early 2022, when it was announced as closed business there.
Brazil is also large enough that players from other parts of Latin America can come and take a large share of the market. based in Mexico Jüsto . online grocery store entered the market in October 2021 and told TechCrunch in 2022 that it is seeing 30% to 40% monthly growth and that the market already accounts for 25% of Jüsto’s revenue. Besides, differentA new Brazilian online grocery delivery company, has seen average orders for its product boxes increase from 13.8% to 17.2% in the past 10 months.
Next step
Instant grocery delivery will still exist, but the future of how companies operate may be different from how they generate revenue. For example, DoorDash is now returning packages to customers.
However, Wenzel insists that JOKR’s plans to increase revenue will not be “achieved by customers”. Instead, the company’s vertically integrated infrastructure allows it to go to local producers to source food and charge customers the same prices they would see in store. grocery.
Brazil’s domestic food production is not dependent on imports, he added. “You can integrate vertically because 90% of the food that is being consumed in Brazil is produced in Brazil. This is not possible in the US or Europe and that is why it allows us to achieve very high operating margins.”
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