Poor harvest for Grocery delivery funding

This year, VC investment in grocery delivery is 4x down to $2.9 billion. Investors are worried grocery delivery, and especially ultra-fast grocery delivery, might not turn profitability any time soon.

VC Investment in Grocery Delivery (2010 - 2022YTD)

According to new data by Quartz, leading ultrafast grocery delivery services have relied on discount offers to push the topline.  The average percentage of orders that are discounted since August 2021 by market:

🇺🇸 USA: Gopuff 24% of orders

🇬🇧 United Kingdom: Gopuff: 48%, Gorillas: 36%

🇩🇪 Germany: Getir: 74%, Gorillas: 30%

🇫🇷 France: Getir: 81%, Gopuff: 62%, Gorillas: 43%

The large percentage of discount orders implies unclear path towards profitability. Consolidation is required to reach a larger scale and bring prices down.

Price inflation and supply-chain bottlenecks are impacting how consumers buy and consumer food. How many consumers will be willing to pay a premium to receive a grocery item in under 30 minutes?

Stay up to date on the grocery delivery market by exploring over 170+ startups on Dealroo.co 👇

In the news

🍞 Global food prices moderate after hitting all-time high. The FAO price index skyrocketed after the invasion of Ukraine. Now it is decreasing for a third month in a row. -Agriculture.com

🏡 Walmart nearly doubles coverage of InHome grocery delivery service. Walmart plans to expand its service from 6 million homes to 30 million homes this year. To achieve this the company plans to hire an additional 3 000 drivers. - SupplyChainDive

🫱🏼‍🫲🏻 Amazon strikes a deal with Grubhub as the food-delivery business struggles. Amazon Prime subscribers now receive one year free of GrubHub+. Amazon might also take a stake in GrubHub. -NYTimes

Latest foodtech deals

Select deals from last week:

🇬🇧 Tropic Biosciences, a UK-based crop protection company, raised $35M to accelerate and bring their product to market. Tropic Biosciences develops novel and "high-performing" crops for bananas (most consumed fruit), coffee (second most consumed beverage after water) and rice (accounts for 25% of calorie intake globally). 

🥬 Explore 600+ other startups focusing on United Nations SDG #2 zero hunger.

🇮🇩 AgriAku, an Indonesian B2B agri marketplace, raised $35M in Series A funding led by Alpha JWC, Gojek's VC arm. Launched in May last year, AgriAku has already raised $41M in disclosed funding.

Other notable foodtech deals from around the globe: 

🇮🇳 Vegrow, a B2B fruits marketplace, raised $25 million led by Prosus Ventures. The startups has grown 15 times in the last 12 months, operating with a margin of around 20%.

🇮🇳 String Bio, a Bengaluru-based next-gen animal nutrition company, raised $20M in Series B funding. 

Read up on all the latest foodtech deals in Dealroom.co

Tip of the week

📣 Dealroom Startup Signals 📣

Dealroom has launched a powerful predictive algorithm to discover the most promising companies, Startup Signals. The input for each Signal's algorithm includes company growth (team size, product growth), job openings, completion score and contextual data (does the company fit into segments of interest), timing (is the startup likely to raise their next round soon) and team composition.

The most valuable early-stage foodtech companies don't have to have the highest Startup Signal. For example, Flink (37) is the most valuable grocery delivery service launched since 2020, but has a lower signal than Zepto (69). 

Dive in

🗺️ Foodtech investment heatmap

🎓 Foodtech university spinouts

🦄 110+ Foodtech unicorns and $1B+ exits

Ivan Draganov

Senior Innovation Analyst
Dealroom

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