Is Europe becoming the battleground for the future of food delivery? Asking this question is in itself a small victory for the European FoodTech ecosystem. Before, the dream for a European startup was to become big enough in its home market to raise funds to go to the US (often with mixed results). For US startups, their expansion target was mainly in Asia. Now it seems that Europe is becoming their biggest target.
In the past weeks:
- DoorDash, a US food delivery startup (first with meals and now with groceries through its dark stores), acquired Wolt for €7B. Born in Finland in 2014 (not bad, seven years to build a €7B company in food delivery), Wolt delivers food in 23 countries with a high presence in Eastern Europe. It had recently started to venture into quick-commerce. Beyond Wolt, DoorDash was among the investors in Flink, a European quick-commerce startup, in its September $600M round.
- GoPuff officially launched in Europe. The US “leader” (at least in terms of money raised, the only “metric” commonly available in this space) of the quick-commerce space had acquired Dija this summer. Now, it rebrands it to its name.
In the meantime, European startups are building their resistance and are starting to land in the US (after expanding in multiple European countries):
- Gorillas announced a series of deals. In the UK, it partners with Tesco. In selected Tesco stores, Gorillas will operate a warehouse that will cater to the needs of both companies consumers. In France, Gorillas announced a similar partnership with Casino (with the addition of Casino taking some startup equity). Earlier this year, Gorillas started an expansion in the US, but it didn’t go beyond New York. it is interesting to see that it now focuses much more on some core countries and looks for profitability there rather than expansion at all costs (even with close to $1B in its coffers).
- Deliveroo is venturing into quick-commerce by launching Hop, its own dark stores. It will do it in partnership with UK retailer Morrisons. This follows an initial partnership where Deliveroo drivers picked products inside the stores (or had them prepared by the store employees).
- Frichti, the French fullstack delivery (cooking meals in its kitchens and delivering them with its “own” drivers) that turned quick commerce startup before it was a thing, is again innovating by launching its private label brand.
- Getir, the Turkish quick-commerce startup, has just opened its first stores in the US in Chicago and will expand in more cities in the coming weeks.
We will see where this go. It seems that in 18 months, we went from a concept to the creation of dozens of players, and now to the concentration phase with four categories:
- one massive pure player in each continent which intends to compete with the other on its key markets: Getir in Europe, GoPuff in the US
- Meal delivery startups heavily invested in players such as Gorillas for Delivery Hero and Flink for DoorDash
- Local players awaiting acquisition, active in one or a handful of cities
- Free agents with their own strategies such as Deliveroo and Frichti
It seems that this concentration will keep moving forward at great speed as some minor players will undoubtedly run out of cash shortly. This may lead either to a series of small acquisitions… or failures (which would reinforce the defiance against this ecosystem).