Consumer/Food/News/ JOKR: “It’s a next gen Amazon” On-demand grocery startup JOKR has raised a $170m Series A to transform shopping habits — and supply chains. By Amy Lewin 20 July 2021 Warsaw Warsaw \Consumer 20 foodtech startups to watch, according to investors By Sadia Nowshin 24 January 2023 Consumer/Food/News/ JOKR: “It’s a next gen Amazon” On-demand grocery startup JOKR has raised a $170m Series A to transform shopping habits — and supply chains. By Amy Lewin 20 July 2021 If you thought Europe’s on-demand grocery sector was running out of investors ready to stump up multimillion euro funding rounds, think again. JOKR, a New York-based delivery startup which launched just four months ago, is announcing a $170m Series A fundraise — part debt, part equity — led by Balderton, Tiger Global and GGV Capital. It now has 100 dark stores across Latin America, North America and Europe (10 in Warsaw and five in Vienna), which stock 1000s of grocery items ready to be delivered to customers in under 15 minutes. It’s hiring fast, expanding into new cities regularly and has a leadership team stuffed with takeaway food delivery veterans (in this case, the founding team of German-headquartered Foodpanda). But there, cofounder and CEO Ralf Wenzel insists, the similarities end with its dozens of competitors. “We’re not only a convenience business, the next 7/11 iteration. We’re more comprehensive than that,” he says, noting that the company wants to expand its offering beyond pantry staples and fresh food to cosmetics, toys and even electronics. “JOKR is the second generation of ecommerce — driving personalisation to a completely new degree and taking out all the middlemen.” “It’s a next gen Amazon.” Cutting out the middlemen Real innovation in the on-demand grocery sector does not come with speed — but with the supply chain, says Wenzel. “80% of the complexity and success [in this sector] is in how you organise and rebuild supply.” JOKR is sourcing its goods from a mix of local producers and big multinational brands. At the moment, around 40% of customer orders are for local products — items from local farmers, coffee roasters or neighbourhood bakeries — and Wenzel says he expects that percentage to only increase over time. What’s more, “roughly half of that inventory is procured directly”: JOKR takes care of picking up those goods and stores them in its distribution centres. There are no middlemen taking a cut or slowing down the process. “The biggest chunk of innovation is in shortening supply chain processes,” says Wenzel. “I’m shocked at how manual, cumbersome and complicated supply chain processes are even with some of the larger brands. That makes it expensive and lacks all kinds of transparency.” “The biggest chunk of innovation is in shortening supply chain processes.” JOKR has also struck deals with large FMCG companies — it won’t disclose which ones — although it’s working with them in quite a different way compared to a traditional food retailer. Unlike a supermarket, which is incentivised to promote the products on which it makes the highest margins or for which it’s paid a placement fee, JOKR is incentivised to promote the products customers have shown they actually want to keep them coming back to its app. That, says Wenzel, creates an interesting dynamic where “a local beer brand, from one day to another, can become as important as a [big global one]”. For companies like Nestlé and Unilever, he says, working with a platform like JOKR “allows them to get direct access to customers — and an understanding of customer behaviour”. Increasingly, local brands are getting in touch with JOKR to inquire about getting listed; Wenzel says around 60% of the brands sold on JOKR got listed as a result of inbound enquiries. Grocery first, everything else next JOKR is focusing on groceries for now — but its ambition is to offer everything from electronics to cosmetics to toys. In its more established markets, JOKR is now offering customers around 5000 SKUs. Not all of its dark stores will stock every single item offered on its platform, however — instead JOKR can move goods between dark stores to meet demand. “Each hub acts as a distribution centre for other neighbouring hubs as well.” In the next two to three months, JOKR will also launch private label products, which traditionally have much higher margins for retailers. It will begin with food but could move into “any kind of product good — even up to cosmetics”. “We have hubs breaking even already.” Turning a profit will be a priority, says Wenzel. “We have hubs breaking even already,” he adds; that’s after picking and delivery costs. “Across the board, including additional product categories, we can have gross margins well above 40%.” At the moment, he says, those margins are only “slightly below [40%]”. (This is similar to gross margins for traditional supermarkets, while their profit margins are generally just 2-3%.) Going global Unlike most of its competitors, JOKR is tackling several continents at once. It launched in Mexico and Brazil, but also began delivering to customers in New York, Warsaw and Vienna in June. Wenzel insists that this is a wise — not an extremely foolish — move. “It’s a feature, not a bug, that we’re going global. For our tech platform to do personalisation, to vertically integrate, to make delivery efficient, we need data. If we’re a single country business, we have a limited data pool. Data is what makes this engine work.” “It’s a feature, not a bug, that we’re going global.” Going into new markets, he adds, is an “incremental effort” — but JOKR doesn’t have to start from scratch. Local people operations and warehouses have to be organised, but the app itself and the way in which suppliers can ‘plug in’ to it remains the same. But JOKR won’t be going everywhere and anywhere. “You won’t see the entire European map covered by JOKR,” he says, although the company is hiring city managers in multiple places in Poland. “In neither London or Berlin does the return on investment profitability criteria look as attractive as in other markets.” Sustainable credentials JOKR is yet to fully calculate the environmental impact of its business. But Wenzel insists that two factors suggest it is more sustainable than a traditional supermarket. “Procuring locally cuts the supply path significantly by distance. Look at how many times a Coca Cola bottle is flown around the world. And how many middle men are involved in that?” he says. Ordering little and often can also cut down food waste in the home, says Wenzel: “The platform allows people to order only what they need and when they need it.” Food delivery veterans This is not Wenzel — nor his cofounders’ — first rodeo. Wenzel previously ran Foodpanda, the delivery platform acquired by Delivery Hero in 2016. JOKR’s COO Aspa Lekka also worked for Delivery Hero, while the startup’s CMO Konstantin Sorger, CPO Sven Grajetzki and CCO Benjamin Bauer all come from Foodpanda too. “The core team has been working together for up to 20 years,” says Wenzel and they’ve now hired several hundred people around them, one third of whom are in tech and product. “We’re not optimising for geographical dominance.” Investors, which include HV Capital, Activant Capital, Greycroft and FJ Labs, seem to think they’re a safe pair of hands. Wenzel says this round of funding (“a strong equity financing”) took just a “few weeks” to close and that JOKR had “the opportunity to pick and choose” who it took money from. (Its competitors Gorillas, Dija and Weezy meanwhile, are reportedly struggling to close their next rounds of investment.) “This is not a race for numbers. We’re not optimising for geographical dominance. This is a business of very high operational complexity; you need an incredibly strong team.” Amy Lewin is Sifted’s deputy editor. She covers VC, foodtech and diversity in tech, and tweets from @amyrlewin. Related Articles Restaurant payments app Sunday pulls out of four markets By Amy O'Brien Click here to read more Europe’s answer to Amazon Go By Cecile Bussy Click here to read more Arab and Turkish grocery delivery startup Yababa raises a huge seed round By Freya Pratty Click here to read more Food delivery is everywhere, so what’s next for restaurants? Sponsored by Hospitality Digital Click here to read more Most Read 1 \Healthtech Is Daniel Ek’s new body scanner worth the hype? 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