Norway’s Kolonial rebrands as Oda, bags $265M on a $900M valuation to grow its online grocery delivery business in Europe – TechCrunch

Food delivery start-ups, especially those focusing on grocery delivery, are huge in Europe, supported by a year of pandemic life that has led many consumers to move to online shopping. We continue to raise funds. Today, these latest ones are from Norway.

Colonial, Oslo-based start-up, offering same-day or next-day delivery of food, meal kits and household items. Its purpose is to offer a “weekly shop” at a price that competes with traditional supermarkets. Raised 223 euros. One million ($ 265 million) in equity round funding. As a result, the company, which is making a profit as of last year, Oda And we plan to use that money (and the new name) to expand into more markets in 2022, starting first in Finland and then in Germany.

The online grocery ordering and delivery market is preparing for a highly crowded market, with investors spending hundreds of millions of dollars on fuel tanks for various start-ups. approach. Oda believes there is a good mix to get to the front line of the pack.

“We realized we were in a unique position,” CEO and co-founder Karl Munthe-Kaas said in an interview with TechCrunch. “We have built a service that targets the mass market, because if you want to get all the baskets for your family, you can’t be a premium service. We do it and make a profit. I’m raising it. “

And now it will be backed by two e-commerce tycoons for its next step. SoftBank Vision Fund 2 and Prosus (a technology holder in Naspers, South Africa) are co-leading the round with past backers Kinevic and strategic investor Norwegians.Soft discount“Chain REMA is participating.

Munthe-Kaas told TechCrunch in an interview that Oda was worth € 750 million ($ 900 million) after money.

Financing is a big leap for Oda (the company has already described itself with a new brand, but the name isn’t officially going into effect until the end of this month, so we’ll follow that lead). PitchBook data Prior to this round, Oda said it had raised only about $ 96 million and had an estimated final valuation of $ 178 million in 2017.

The company has certainly come a long way. Founded in 2013 by 10 friends, Colonial seems to have had a more modest vision at first. Norwegian colonial does not mean “colonial” (still, Munthe-Kaas is one of the big reasons startups want to avoid it, change), but “corner shop”. Recently, Oda has focused on competing with large supermarkets. The average order size is $ 120, but behind the scenes there is a much more efficient cost base.

It is also helped by the current climate. Online grocery shopping has grown and matured for some time, but last year it was a true greenhouse in the process: Covid-19, shelter-in-place orders, and the general desire of people to stay away. All made online grocery shopping for the first time, having more consumers try, and many stuck to it.

“Last year, the market went online, accelerated by Covid, and saw a major inflection point in groceries,” Prosus Food CEO Larry Illg said in a statement. “Oda’s leadership and remarkable growth in Norway, combined with innovative technology and the ambition to expand across Europe and beyond, will make it an ideal partner for tackling food opportunities in the coming years. . “

Oda has grown over the years and has become a sector leader in the category that has undoubtedly contributed to the definition in his home country. It made a profit of € 200 million last year and currently manages about 70% of Norway’s online grocery ordering and shipping market based on its unique approach to the model.

In that model, Oda builds and manages its own supply chain from producer to consumer (without partnerships with third-party physical retailers) and produces some of the products they order (such as baked goods). Areas that include managing large orders using a centralized fulfillment center.

“A centralized warehouse means that there are 50 supermarkets in one place,” said Munthe-Kaas, adding that this would also significantly green the business.

On the other hand, these fulfillment centers operate “very efficiently” in his words. Oda’s grocery picking averages 212 units per hour. That is, the amount of items “picked” in a weekly order divided by the number of hours in a week. According to Munthe-Kaas, the next closest UPH number in the industry is 170 UPH in Ocado, UK, the standard is close to 100 UPH, and in-store picking (customers choose their own products from the shelves). It is averaged. It will come out at 70UPH.

All of this leads to much more cost-effective operations, such as more efficient orders and inventory rotation, helping Oda increase the overall profit margin on sales. Munthe-Kaas didn’t elaborate on how Oda gets such a high UPH number. He pointed out that this was competitive knowledge and that a lot of automation and data analysis were built into the process.

This is Softbank’s audible music, which has been a complex move in e-commerce over the past few years, and nevertheless, many interesting Jaguars have realized that it can’t improve the challenging unit economy. I’m boosting my notes.

“Oda’s leading position in Norway is tailor-made to provide a personalized, holistic and reliable online grocery experience,” Munish Varma, managing partner of SoftBank Investment Advisors, said in a statement. It demonstrates the benefits of a data-driven approach. ” “We believe that Oda’s customer-centric focus, market-leading automation technology, and fulfillment efficiency are the winning combination, and to expand internationally for the benefit of both our customers and our suppliers. We are positioning Oda to succeed in. “

A major challenge for Oda in the future is whether the business model developed for Norway can be ported to further markets.

Mr. Oda not only seeks customer traction for his business, but also has the potential to compete with fierce competition with others who are trying to expand their business across national borders.

There are other online supermarket plays Rohlik From the Czech Republic (raised $ 230 million in March); Everli From Italy (formerly known as Supermercato24, but raised $ 100 million). picnic From the Netherlands (recent funding hasn’t been announced yet, but given that it feels like a matter of time. Publicly laid out international ambitions); British Ocado ( Collected a huge amount of money In pursuit of unique international ambitions).

There is also a wave of companies building more fleet-of-foot approaches with low inventories and much shorter delivery times. The idea is that it can accommodate both individuals and different shopping methods. If you are a family.

Among these so-called “q-commerce” (quick commerce) players, it covers just a few of the recent funding rounds. Globo Raised $ 528 million last week. gorilla Berlin has raised $ 290 million.Turkey’s Getir When Sequoia first entered the European food market, it earned $ 300 million at a valuation of $ 2.6 billion.And Zap reportedly We have also raised $ 100 million in London.

Launched last week, Deliveroo delivers groceries (in partnership with Sainsbury’s) alongside a restaurant delivery service.

Ironically, these are more alternatives to corner shops than Oda itself (formerly called Colonia, or “corner shop” in Norwegian), and Munthe-Kaas called them Oda’s activities. He said he considers it to be “complementary.”

Indeed, Munthe-Kaas is very keen on the basic rulebook that Oda has lived for years.

“We need to beat the physical store with quality, assortment and price, and deliver it home,” he said. “This is a margin business and the only way to optimize it is to be completely relentless.”

But he also understands that this may eventually need to be fixed in some markets. For example, the company does not work with other Norwegian retailers, but even the investment in REMA is not for distribution, but for economies of scale in sourcing products that REMA and Oda sell independently of each other. This may be the following route. Oda chooses to enter other markets.

“We are in talks with several other retailers, wholesalers and producers,” he said. “Obtaining procurement terms and ensuring upstream logistics is important, but there are many ways to achieve it. We are very open to partnerships in that regard, but the way to win is still value. I think it’s about running a chain. “

Norway’s Kolonial rebrands as Oda, bags $265M on a $900M valuation to grow its online grocery delivery business in Europe – TechCrunch Source link Norway’s Kolonial rebrands as Oda, bags $265M on a $900M valuation to grow its online grocery delivery business in Europe – TechCrunch

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