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London’s fast delivery grocery startup Zapp zooms $200M funding, Formula One star Lewis Hamilton also invests

Zapp
Image credits: Zapp

Since the outbreak of the pandemic, the global rapid grocery delivery market is buzzing through the roof. Recently, DoorDash-backed instant grocery startup Flink roped $750M, not so long ago Turkish 10-minute grocery delivery giant Getir acquired London-based Weezy and recently the teenager founders from India who launched Zepto – secured $100M for their rapid grocery delivery startup.

Now another one that is making a lot of buzz these days is London-based Zapp, backed by Atomico and claims to deliver everyday grocery items to the doorsteps of customers within 20 minutes, 24/7.

$200M investment

Today, Zapp has picked up $200 million in Series B funding, thereby joining the other mega funded startups. The financing round was led by internationally renowned investors Lightspeed, 468 Capital, and BroadLight Capital alongside participation from Atomico, Burda and Vorwerk Ventures. Also, entrepreneur and Formula One legend, seven-time World Champion, Sir Lewis Hamilton joined the investment round.

Last year, Dutch entrepreneur and celebrity icon Bas Smit also became an investor in the firm, when they expanded their services to The Netherlands.

With this round, the total funding raised by Zapp is now $300 million. The company will use the funds to invest deeper into its customer experience and technology, in both existing and new markets. Also, it will continue building the ‘need it now’ supply chain.

Joe Falter, Co-founder of Zapp said: “With this new capital we will focus on achieving profitability in our existing markets as well as bringing Zapp to new customers globally. We’d like to thank our customers for having made Zapp their go-to-platform for everyday needs – we will continue to invest in improving our product and customer experience as we scale.”

Rytis Vitkauskas, Partner at Lightspeed Venture Partners said: “We’re thrilled to be part of the company’s journey as it brings a totally new experience to customers in the convenience grocery market and continues to invest for the long term.”

Alexander Kudlich, General Partner at 468 Capital, said: “We’ve known and worked with the Zapp founders over the last decade, and they’ve assembled a team of seasoned operators with domain expertise that is unprecedented in the industry. We’re absolutely delighted to be able to support the next phase in the company’s journey and excited to see how the team will continue to innovate and deliver on behalf of customers.”

Sasha Astafyeva, Partner at Atomico: “We’re continually impressed by the focus and execution shown by Zapp, with its strategy to win first in convenience ‘mega cities’ like London, one of the largest convenience retail markets in the world.”

Customer-focused approach

Zapp was founded in 2020 by Joe Falter and Navid Hadzaad. It is worth mentioning that Falter led the on-demand services business through to the group’s IPO, and Hadzaad was a product leader at Amazon’s Seattle HQ after founding GoButler and scaling several ventures at Rocket Internet. Also, the leadership team of Zapp includes former employees of Deliveroo, Just Eat, Domino’s and Tesco.

Started as a single Zappstore in West London, it has grown to dozens of micro-fulfilment centres in the city. Last year, the company expanded its services to ‘mega cities’ including Manchester, Amsterdam and others. Last year, Zapp opened a new 25,000 square foot distribution centre (DC) in London to reduce out-of-stock events by enabling intra-day replenishment for its London Zappstores.

With a customer-focused approach, Zapp delivers last-minute snacks, drinks, essential groceries, personal health and hygiene goods, over-the-counter medicines, and other everyday items in 20 minutes, 24/7.

To get the service, customers have to download the Zapp app on iOS and Android and enter their location. They can browse nearly two thousand curated products across a wide range of categories. On placing the order, the products will be picked, packed, and delivered within 20 minutes.

In terms of pricing, Zapp charges users a flat delivery fee of £1.99 per order there is no minimum order value. However, the service does not charge a delivery fee for orders over £30.

Focus on sustainability

Competing with other rapid delivery online grocers including Gorillas, Getir, Weezy, Zapp, Jiffy and more, Zapp emphasises to have been designed with sustainability in mind. The company employs an all-electric fleet comprising both e-bikes and e-mopeds. Furthermore, products are delivered in recyclable paper bags. Notably, the company has partnered with Planetly to track and reduce its carbon footprint.

While the grocery delivery vertical gets more competitive in the UK with local players, the US participants also consider getting a bigger slice of the pie. In 2021, DoorDash was rumoured to buy stakes in German online food giant Gorillas. Adding to this competition, US-based on-demand grocery giant Gopuff already bought UK-based Dija. The SoftBank-backed company, founded in Philadelphia in 2013, is now prepping for IPO with Goldman Sachs, Morgan Stanley.

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