Rohlik Secures $119M Funding at $1.2B Valuation - Grocery Delivery Expansion

The Rise of Virtual Supermarkets in Europe

The concept of “instant” grocery delivery has gained significant traction among food startups across Europe. These services typically offer a limited selection of goods, rapidly packed from dedicated “dark stores” and delivered to customers within a timeframe of 10 to 15 minutes. However, a new company is redefining this model with a more extensive offering.

Rohlik’s Expansion and Funding

Rohlik, a Czech startup, has developed a virtual supermarket boasting over 17,000 items, delivered within approximately two hours. The company has recently secured €100 million ($119 million) in funding to facilitate its expansion throughout Europe. This Series C investment has resulted in a valuation of €1 billion ($1.2 billion) for Rohlik.

Investment Details and Future Plans

Index Ventures spearheaded the funding round, having also participated in Rohlik’s previous $230 million Series B raise just three months prior. Existing investors, including Partech and Quadrille Capital, also contributed to this latest investment.

Strategic Growth and Market Entry

According to Tomáš Čupr, Rohlik’s founder and CEO, the swift fundraising is intended to capitalize on current market conditions and accelerate expansion efforts. The startup has already established a presence in Hungary and Austria and is preparing to launch in Germany, specifically Munich, in the coming months.

Expanding Reach Across Europe

With the additional funding, Rohlik plans to extend its operations to Romania, Italy, France, and Spain. Čupr noted that these markets were initially considered but were postponed due to the company’s unproven status originating from Eastern Europe.

The Impact of the Pandemic on Online Grocery Shopping

The Covid-19 pandemic dramatically altered consumer behavior, particularly in the realm of food purchasing. A significant increase in online grocery shopping and home delivery services was observed, as people sought alternatives to traditional in-store experiences.

Rohlik’s Profitable Growth

Rohlik had been steadily growing in the Czech Republic for six years before seeking external funding. Notably, the company is already profitable in its home market, and its growth accelerated with the shift in consumer demand during the pandemic.

Revenue and Customer Base

In 2020, Rohlik’s revenues exceeded €300 million, serving over 750,000 customers. While 2021 figures are not yet public, the recent funding suggests continued positive traction. The average order value ranges from €60 to €100, with customers typically shopping once a week, as stated by Čupr.

Localized Branding and Product Mix

Rohlik adapts its branding to each new market – Kifli.hu in Hungary, Gurkerl.at in Austria, and Knuspr.de in Germany. However, the core business model remains consistent: a combination of wholesale purchases, partnerships with brands like Marks & Spencer, and products from local small businesses.

Supporting Local Businesses

Rohlik distinguishes itself by actively supporting local businesses, a unique approach in the online grocery sector. This contrasts with models that often displace smaller retailers. The company aims to provide a platform for independent shops to reach a wider audience.

Expanding Product Offerings

Čupr highlighted a perceived gap in the online grocery market, where offerings often mirrored basic supermarket selections. Rohlik addresses this by incorporating local enterprises, such as an Italian pasta maker gaining access to customers in Austria or Hungary.

A “Near Food” Approach

The company’s strategy includes a “near food” approach, offering not only groceries but also items like clothing and kitchenware. This extends to supporting local butchers, bakers, fishmongers, and pharmacies.

Reimagining the Grocery Shopping Experience

Rohlik aims to redefine the grocery shopping experience, moving beyond simply replicating the convenience of a corner shop. Instead, it focuses on saving customers time and effort, particularly on weekends.

Growth Potential in Untapped Markets

Countries like France, where online grocery shopping has been slower to gain momentum, present significant growth opportunities for Rohlik. This potential resonates with European investors familiar with local shopping habits.

Investor Confidence and Rohlik’s Formula

Jan Hammer, a partner at Index Ventures, emphasized the combination of a substantial market opportunity and Rohlik’s unique business model as key factors driving the investment. He noted the positive customer response to the company’s offerings.

Challenges and Opportunities

The long-term shift in consumer habits remains to be seen, as does the response from established players in the market. Rohlik’s commitment to supporting traditional businesses presents both an opportunity and a challenge, as it navigates a landscape of established loyalties.