On-demand grocery delivery, which really took off after the Covid-19 outbreak, continues to attract a lot of interest from investors. The most ambitious entrepreneurs in the industry are attracting significant funds in the meanwhile.
Now Berlin-based online grocery delivery startup Flink that sells food and other supplies at supermarket prices and promises delivery under 10 minutes, has secured $750M in a Series B round of funding headed by a strategic investor, DoorDash, valued at $2.1B ($2.85B post-money). The round saw participation from other investors such as Mubadala Capital and other existing and new ones.
The funds will be utilised to grow the company’s operations. Flink — which means “quick” in German — currently has over 140 delivery hubs in more than 60 cities, serving up to 10M clients, with Germany and the Netherlands being its most important markets.
Battle for online grocery delivery
The battle for online food and grocery delivery supremacy has recently been fought in Europe, particularly in Germany.
Flink is one of numerous food delivery start-ups that grew swiftly during the COVID-19 pandemic by delivering goods within minutes of an order being placed through a smartphone app, including Gorillas, Getir, and Weezy. There are other players that are giving tough competition to the startup: Delivery Hero, Just Eat Takeaway and others.
Surprisingly, Flink has only been in existence for a year and has only been commercially active for seven months. “We are only getting started,” said founder Oliver Merkel. “We receive daily questions from people asking when they can reach our services.”
Flink’s Strategy
Flink has caught eyeballs amid the crowded field of quick delivery firms, according to Oliver Merkel, is due to the founders’ track records. Merkel worked for years as a management consultant in the grocery and retail industries at Bain; co-founders Julian Dames and Christoph Cordes are Rocket Internet alumni who launched the food delivery startup Foodora and the furniture e-commerce company Fashion for Home, respectively.
Meanwhile, Flink, which had just completed its own investment round, was dealing with mergers and acquisitions. Both e-commerce and delivery behemoth Amazon, as well as another US fast grocery delivery player GoPuff, had targeted the startup as an acquisition possibility. However, things didn’t turn out the way they wanted it to be because of Flink’s high valuation.
Flink has been silently laying the groundwork for its market approach, which begins with how it obtains goods.
E-commerce business comes with its own set of challenges as it is considered as economies of scale, which is one of the reasons why competing against Amazon, the ecommerce behemoth, is so difficult, and the same is true for groceries, which must be procured by the shops who sell them.
Flink’s strategy has been to collaborate with large merchants and rely on them for those agreements, rather than trying to grow up to have the best negotiating leverage for buying in goods.
Flink’s goal in growing has been to keep the concept of quick food delivery as normal as possible and make it available to as many people as possible, not simply young urbanites with discretionary income.
Flink, which was launched in 2020 by Oliver Merkel, Julian Dames, and Christoph Cordes is one of numerous European delivery applications that promises to deliver fresh goods to customers’ doors in minutes.
In a statement, DoorDash’s CFO, Prabir Adarkar, stated, “We’ve been impressed by Flink’s growth and client retention.” “Oliver, Julian, Christoph, and their colleagues share our operator mindset and bring a wealth of knowledge to the table.” It’s hardly surprising that they’ve established themselves as the market leader in key European markets in less than a year.”
“As Flink continues on its hypergrowth trajectory, this capital round is a watershed moment for the company,” Mubadala’s Amer Alaily remarked. “We’re delighted to see them disrupt the instant grocery delivery field in Germany, France, the Netherlands, and beyond – and we look forward to continuing to be a trusted partner to Oliver, Julian, Christoph, and their team.”
