Rohlik Raises $230M to Expand European Grocery Delivery

The Rise of Online Grocery Delivery and Rohlik's Expansion

Over the past year, food delivery services – encompassing restaurant orders, meal kits, and groceries – have experienced widespread adoption, particularly amidst the global health crisis. Today, Rohlik, a Czech startup aiming to establish a leading pan-European presence in the online grocery sector, has announced a substantial funding round to facilitate its growth.

Rohlik's Business Model and Funding

Rohlik operates an online grocery platform, procuring goods wholesale and partnering with established businesses like Marks & Spencer, while also sourcing products from local small businesses. The company has secured €190 million ($230 million) in new funding.

This capital injection will be utilized to broaden its reach within existing markets – the Czech Republic, Hungary, and Austria – and to enter Germany, Poland, Romania, and other European countries in the coming months.

Financial Performance and Growth

Rohlik’s online store currently features approximately 17,000 items. The company reported a 101% revenue increase in fiscal year 2020, reaching €300 million with a customer base of 750,000. Notably, Rohlik is currently profitable.

According to CEO and founder Tomáš Čupr, this funding round will provide significantly more resources for expansion than the company’s existing financial standing would allow.

Differentiating Factors in a Competitive Market

The online grocery delivery market is becoming increasingly crowded, with both established retailers and “digital native” brands vying for market share. Rohlik distinguishes itself by catering to the unique shopping preferences of European urban consumers, who frequently combine purchases from smaller businesses with supermarket trips.

A Unique Value Proposition

“We discovered a successful formula combining exceptional service – two-hour delivery within 15-minute windows – with a diverse product range,” explained Čupr. “While many online grocers primarily offer supermarket assortments, we complement that with offerings from local butchers, fishmongers, bakers, and produce sellers – items not typically found in large retail chains.”

“We are effectively consolidating five to seven shopping trips into one, which has been key to our scalability,” he added.

Investment Details

The funding round was spearheaded by Partech, with substantial contributions from Index Ventures. Additional investors included the EBRD, Quadrille Capital, J&T Bank, R2G, and Enern, an existing investor.

While the exact valuation remains undisclosed, reports suggest it is around $600 million.

The Broader Context of Online Grocery Growth

Founded in 2014, Rohlik’s funding arrives at a pivotal moment for the online grocery industry, both in Europe and globally.

Demonstrated Demand

Consumer behavior over the past year has definitively demonstrated the sustained demand for these services. Lockdowns and social distancing measures prompted a significant surge in online grocery ordering.

Investor Interest and Innovation

This surge has attracted considerable investor interest, particularly in startups that are innovating within the sector, even as larger players like Amazon have adjusted their strategies.

Recent funding rounds in the space include investments in Dija, Gorillas, Ocado, Wolt, Glovo, Weezy, Crisp, and Flink, demonstrating the intense competition and opportunity.

Diverse Approaches to the Online Grocery Model

Startups are adopting varied approaches, differing in target markets, food selection, and sourcing strategies. Some utilize “dark” convenience stores, while others employ large fulfillment centers. Some build supply chains from scratch, while others collaborate with existing retailers.

Rohlik's Strategic Advantages

Rohlik’s success is attributed to its effective integration of logistics technology with a deep understanding of the market, drawing on Čupr’s prior experience in restaurant delivery.

Investor Confidence

“We are making a significant investment and are not seeking businesses that merely replicate existing services,” stated Index partner Jan Hammer. “We’ve observed various models globally and have positive experiences with Good Eggs. As a technology investment firm, we focus on synergistic areas like commerce payments and warehouse software. The overarching trend is a shift from offline to online through improved business models.”

Rohlik utilizes large fulfillment centers strategically located closer to customers, potentially offering opportunities for expansion as traditional supermarkets become less profitable.

Competition and Future Prospects

Picnic, a Dutch company with a similar model, last raised funding in 2019. The competitive landscape suggests further consolidation and investment in the sector.

Rohlik’s opportunity lies in exporting its successful model to countries with comparable market dynamics.

Partech's Perspective

“Rohlik is the most promising player in the European online grocery industry,” said Omri Benayoun, general partner at Partech. “We are proud to partner with founder Tomáš Čupr, whose commitment to service, sustainability, and vision for the grocery sector aligns with our values. Rohlik’s operational expertise has earned the trust of both local merchants and global FMCG companies, enabling it to deliver superior quality and pricing compared to traditional grocery giants.”

Updated with more updated numbers from Rohlik on its full-year figures, and some changes to investor names in this round.

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