Flink Raises $52M to Expand Grocery Delivery

The Rapid Expansion of On-Demand Grocery Delivery in Europe

The European on-demand grocery delivery sector is experiencing significant growth, particularly with the emergence of numerous startups adopting a vertical integration strategy through the operation of dedicated delivery stores – often referred to as “dark” stores.

Flink Secures $52 Million in Seed Funding

Berlin-based Flink has recently announced a substantial $52 million seed funding round. This investment signifies the increasing confidence in the on-demand grocery model.

Target Global is leading the round, with participation from existing investors Northzone, Cherry Ventures, and TriplePoint Capital, a Silicon Valley-based debt provider. Cristina Stenbeck of Kinnevik is also contributing to the round personally.

The Role of Debt Financing

The inclusion of TriplePoint Capital is noteworthy. Debt financing is particularly suitable for capital-intensive businesses, especially those requiring the development of physical stores and complex logistical networks.

This capital injection, bringing the total funding to $64 million, coincides with Flink’s expansion into the Netherlands and France. The company has already launched 10 dark stores across German cities including Berlin, Hamburg, Munich, Nuremberg, Dusseldorf, and Cologne, with further expansion planned.

Flink's Competitive Landscape

Officially launched just six weeks ago, Flink, meaning “quick” in German, promises grocery delivery from its own fulfilment network in under 10 minutes. This positions them against competitors like Berlin’s Gorillas, London’s Dija and Weezy, and France’s Cajoo, all focused on fresh groceries.

Other players, such as Zapp, operate in a stealth mode and concentrate on a convenience store model, akin to the U.S. unicorn goPuff. Notably, goPuff is also exploring European expansion and considering acquisitions, including a potential deal with the U.K.’s Fancy.

A Strong Founding Team

Flink’s recent funding and the experience of its founders make it a company to watch closely. The company was founded in late 2020 by Oliver Merkel, a former Bain & Company partner; Christoph Cordes, former co-CEO of home24; and Julian Dames, previously co-founder of Foodora, CMO at foodpanda, VP at Delivery Hero, and at SoftBank.

Grocery Delivery vs. Convenience Store Models

Flink is primarily positioned as a grocery delivery service, similar to Dija and Gorillas. The immediate competition lies with traditional supermarkets offering scheduled deliveries, but not typically on-demand service.

Delivering fresh produce quickly presents logistical hurdles, including supply chain management and ensuring product availability. This differs from the convenience store model focused on items like snacks and beverages, similar to the original goPuff approach.

Challenges and Opportunities in On-Demand Delivery

Cherry Ventures founding partner Christian Meermann believes that economically viable on-demand grocery delivery is achievable, despite the logistical complexities. He emphasizes the potential scale, given the frequency of grocery shopping and the potential for larger basket sizes.

He suggests that a pure convenience store offering may not offer the same growth potential, though there is some overlap between the two models.

The Future of Instant Shopping

Jessica Schultz, general partner at Northzone and a HelloFresh co-founder, predicts that instant shopping delivery will become the standard for retail. She believes groceries are an ideal category to begin with, due to the nature of the products and consumption patterns.

“Receiving groceries, including fresh herbs, fruits, and bread, in under 10 minutes is a remarkable experience,” she states. “I am impressed by the Flink team’s progress in this rapidly evolving industry. Their strategic approach and rapid growth are exceptional.”

Schultz argues that existing supermarket infrastructure is ill-equipped for express grocery delivery and that established companies lack the necessary agility to build on-demand services. “Instant delivery necessitates new infrastructure, such as micro-warehouses, and a fully integrated approach,” she adds.

Expansion Plans

The new funding will support further expansion within Germany and into additional European markets this year. Flink plans to launch its first stores in the Netherlands and France in Q2 2021, starting in Amsterdam and Paris.

“Customers are enthusiastic about receiving their groceries in 10 minutes,” says Flink founder Oliver Merkel. “We’ve received excellent NPS feedback and observe frequent usage. This funding will accelerate our rollout across Europe.”

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