Wolt Secures $530M Funding to Expand Beyond Food Delivery

Wolt, the online ordering and delivery service headquartered in Helsinki, Finland, which began by concentrating on restaurant deliveries but has broadened its scope to encompass other product categories, has secured $530 million in a new investment round. Iconiq Growth spearheaded the funding, with contributions from Tiger Global, DST, KKR, Prosus, EQT Growth, and Coatue.

Existing investors, including 83North, Highland Europe, Goldman Sachs Growth Equity, EQT Ventures, and Vintage Investment Partners, also participated in this round. This latest financing brings the total funding Wolt has received to $856 million. While Wolt has not revealed its current valuation, it was previously identified as a European “unicorn” following its Series D funding.

According to co-founder and CEO Miki Kuusi, “Operating within a highly competitive and well-capitalized sector, this funding enables us to adopt a long-term strategy focused on strengthening our presence in existing markets.” He further stated, “Despite the challenges presented by 2020, we maintained our growth trajectory, achieving preliminary revenue of $330 million, contrasted with a net loss of only $38 million. Considering the $670 million in capital raised this year, we are well-positioned to invest in our team, technology, and market expansion in the years to come.”

Since its launch in 2015 with a selection of 10 restaurants in its hometown, Wolt has grown to serve 23 countries and 120 cities, primarily throughout Europe, as well as in Japan and Israel. Recently, mirroring trends in the food delivery industry, Wolt has extended its services beyond restaurants to include grocery and retail items. The company now facilitates the delivery of a diverse range of products, from beauty products to pet supplies and pharmaceuticals.

Kuusi clarified, when asked about the funding structure, that “This was primarily a primary raise,” meaning it didn’t heavily rely on existing shareholders selling to new investors. He added, “We are not disclosing the valuation at this time, but we previously announced that our Series D round in early 2020 valued the company at over €1 billion.”

Kuusi explained that the recent funding is based on the conviction that local, offline services will increasingly transition online through companies “capable of effective execution and delivering a superior customer experience.” He noted, “We initially concentrated solely on restaurants, as it represents the largest local service with a naturally frequent usage pattern.” He continued, “We quickly discovered that the key to successfully bringing restaurants online was providing a fast and reliable delivery service for restaurants that hadn’t previously offered delivery. We achieve this by managing the complexities of delivery on behalf of the restaurant.”

However, achieving this efficiently and sustainably proved particularly challenging in the small and demanding Nordic market. To overcome this, Wolt developed a “highly optimized logistics system for last-mile delivery” that Kuusi says allows the service to function effectively even in “small cities with minimal income inequality, limited population density, and high labor costs.”

“This allows us to operate efficiently even with relatively low order volumes, enabling us to grow and expand quickly with less funding than some of our competitors. We simply had no alternative, given the difficulties of our home market.”

Building on this foundation, Wolt is expanding into other on-demand and local delivery services, with the ambition of becoming what Kuusi describes as “the everything app” for goods and services. “Wolt is now much more than just a restaurant delivery service; you can order groceries, electronics, flowers, clothing, and a variety of other items through our platform,” he explained. “We envision a future where purchasing items like Nike shoes involves just a few taps on Wolt, with any pair of shoes delivered to your door within 30 minutes. This is the reality we are working towards with the Wolt team.”

Regarding the increasing investment in the dark convenience store model, Kuusi stated that Wolt is also investing in its own dark store operation, known as Wolt Market. “It’s not surprising to see growing financial support for this sector,” he acknowledged. “We strongly believe in a hybrid model that will include both traditional brick-and-mortar retailers and dedicated online retailers. The latter category is still in its early stages and is poised for significant growth in the coming years.”