COVID-19 and the subsequent shutdown forced many businesses to close their retail stores, resulting in the emergence of a number of online grocery app developers to provide enhanced services to their consumers. From 2020 to 2024, the worldwide online grocery industry is expected to develop at a CAGR of 25.02 per cent, reaching US$ 663.33 billion.
JOKR is one of the promising newcomers to the rapid grocery delivery market in the last few years. Launched by Foodpanda founder Ralf Wenzel (CEO) along with Aspa Lekka (COO), Benjamin Bauer (CCO), Sven Grajetzki (CPTO), and Konstantin Sorger (CMO) in March last year, JOKR currently operates in North America, Europe, and Latin America.
In July of last year, the online grocery and retail delivery company closed their Series A funding round at $170 million – with lead investors like Balderton, GGV Capital, and Tiger Global Management. The funding came 3 months after the organisation began business in the United States, Latin America, and Europe. In Series B funding dated back in November, the company raised $260 million, including lead investors like SoftBank.
"We really believe the world needs a new Amazon. We have the opportunity to create faster Amazons, more personalised Amazons, more sustainable Amazons, and more local Amazons." - JOKR’s Founder and CEO, John Ralf Wenzel, told Reuters in an interview. "It's not just convenience on-demand, but a new generation of retail."
JOKR, which began in New York originally, intends to expand to cities around the United States, Latin America, and Europe. It is currently operating in nine Latin American cities, including Brazil, Mexico, Colombia, and Peru, along with Poland and Austria in Europe.
JOHN RALF WENZEL AND HIS AMBITION TO CREATE AN AMAZON ON STEROIDS
With JOKR, Ralf Wenzel, the former Delivery Hero and Softbank executive, established a worldwide, fast and intuitive platform for hyper-local food and retail delivery, joining an industry that is garnering significant investment and undergoing tremendous growth.
Prior to creating JOKR, he co-founded three businesses, notably Foodpanda, one of the world’s most famous food delivery organisations with operations in 40 countries, which he later decided to merge with Delivery Hero. He also co-founded Skrill, Europe's first e-wallet and largest online payments provider, as well as Tocororo Ventures, an early-stage venture capital funding company. Ralf formerly focused his enterprises on developing markets, namely Southeast Asia, the Middle East, and Latin America. He also served as Softbank's managing partner.
Wenzel's journey begins in East Germany, where he was brought up practically on the other side of the Berlin Wall, and lived through the communist era in Eastern Europe. He believes that building a successful impact in the community is in our hands, in the hands of people and organizations. He was inspired by the independence that the internet offers and wanted to be a part of this movement of freedom, and the World Wide Web, by linking people and economies from all over the world. Wenzel’s dedication to the globalisation and technology ecosystem for the last 20 years was the right option at the appropriate moment.
When it comes to launching JOKR, there are certain factors that influenced his decision. The first one is that, after observing customer behaviour change at a rapid and escalating rate for twenty years, he believes it has recently transformed into how each consumer needs a more unique online experience. Every consumer expects to be addressed uniquely, so personalisation is more important than ever.
The second point is that, nowadays, individuals relish moments rather than planning ahead; it's all about the ‘now.’ This is why, if you don't design an e-commerce platform that can fulfil orders instantaneously and deliver items in minutes rather than hours, you'll be sacrificing a strategic advantage.
The third factor is that consumers are looking for local items in greater numbers than they have in the past. Independent local brands accounted for more than half of worldwide FMCG growth last year, compared to multinational brands. And finally, one of the main reasons Wenzel wanted to start a new organisation was to contribute back to the environment and achieve sustainable development.
Sustainability, localised goods, rapid delivery, and a high level of personalization are the four characteristics that can be identified as the backbone of a successful online business today. These are the factors that led to the creation of the JOKR proposition, which entails a modern era of grocery delivery and online retail services.
"When we looked into the whole question of what customers want, when they wanted it, and where they wanted those specific products, this is the centrepiece of the JOKR proposition hyper-personalization, by contextualizing time with demand, products and customers, while building these permutations, which is bringing data points of what, when and where the customer wants the products together."- John Ralf Wenzel
Coming to JOKR’s work ethic and team-game, Wenzel, with his team and co-founders Aspa Lekka, Sven Grajetzki, Benjamin Bauer, and Konstantin Sorger, believes that if they intend to create a new form of organisation that is socially and environmentally responsible, they must ensure that equitable treatment is provided to everybody as well.
"The first component is how to build the right team with the right constellation. The success of a business is not driven by the CEO or COO, or the success of a business— it’s driven by the entirety of a team." - John Ralf Wenzel
MARKET GROWTH, INVESTORS, COMPETITORS, AND PARTNERS
The growing adoption of advanced technology, together with the increased popularity of internet access, is largely driving online grocery purchases. Furthermore, the demanding consumer working schedules and the expanding labour force are fuelling the online grocery business. The introduction of e-commerce platforms, as well as a growing preference for hassle-free shopping experiences, is further fuelling market expansion.
The breakout of the COVID-19 pandemic in 2020 has also increased online shopping for groceries and essential products owing to the temporary shutdown of brick-and-mortar retail channels. The installation of strict lockdown laws and social distancing measures to eliminate coronavirus transmissions has resulted in a growing customer preference for online grocery platforms. Additionally, various e-commerce sites like JOKR have provided a large variety of localised grocery items, along with contactless and timed delivery services, strengthening market growth.
The market for hyperlocal goods is estimated to be $1,324.2 billion in 2019 and is expected to grow to $3,634.3 billion by 2027, at a CAGR of 17.9 per cent from 2021 to 2027. The rise of smartphones, increased urbanisation, evolving consumer preferences, and improved lifestyles have been driving the expansion of the hyperlocal market globally and are expected to continue to drive the industry over the projection period. This is mostly due to increased investment in e-commerce businesses and the rising trend of corporate digitization.
"Last year, more than 50% of global FMCG growth was generated by small local brands, as compared to global brands. If you look around at the e-commerce platforms, and of course with large offline retailers, maybe 10% to 15% appreciate local brands, but the vast majority of the demand is for local brands." - John Ralf Wenzel, CEO and co-founder of JOKR.
"In order to fulfil on the promise of JOKR, which are local products to local customers, personalization, sustainability, and equal price points to offline retail, it has been a requirement and necessity to build out a narrow grid of micro fulfilment centres in every single neighbourhood," Wenzel added.
The online grocery sector will continue to develop traction as technology advances emerge as a dominant trend. Additionally, several e-commerce behemoths are embracing and purchasing hyperlocal businesses in order to cut transportation costs and substantial delivery time.
Below we’ve listed three of JOKR's major competitors who offer similar services on the market right now.
Gorillas, which was founded in Berlin in May by Kaan Sümer and Jörg Kattner, has already extended to over 12 locations, including Amsterdam, London, and Munich. The firm allows you to get groceries and other home supplies on-demand, with an average delivery time of 10 minutes. Customers are assisted by the firm in obtaining what they want at the time they require it.
The Berlin-based on-demand grocery delivery operator has raised "near to" $1 billion in Series C funding, the latest example of the strong investment opportunities fuelling activity in urban food shopping applications throughout the continent and beyond.
Getir was founded in 2015 in Istanbul by Nazim Salur, Serkan Borancili, Tuncay Tutek, Dogan Dalyan, and Mert Salur. Getir merges urban logistics and mobile technologies to enable the immediate delivery of items in metropolitan locations. Getir has already secured over $1 billion in three different fundraising rounds in 2021. Silver Lake, Mubadala, Sequoia, and Tiger Global were among the new investors in the Istanbul-based Corporation.
Buyk is a real-time retail company that delivers grocery items and essential items to consumers' doorsteps in 15 minutes or less, with no minimum purchase or delivery cost. Rodion Shishkov and Slava Bocharov, industry veterans who co-founded and operated Samokat, one of Europe's top ultrafast grocery delivery providers, led the company's founding team. Buyk has raised $46 million in two rounds of investment. Their most recent fundraising came in the form of a debt financing round on December 13, 2021.
However, according to founder and CEO Ralf Wenzel, with JOKR the commonalities end with its large number of competitors. The strategy revolves around what JOKR refers to as micro-hubs, which are essentially a collection of storefronts on side streets in more densely populated areas. To effectively organise such micro-fulfilment centres for efficiency, the business analyses data to estimate what consumers would want, when they would want it, and where.
Hans Tung, the managing partner of GGV Capital and a recently appointed member of the JOKR board of directors, stated: "Ralf has put together an all-star team for food delivery that will transform the retail supply chain. The combination of food delivery experience and the sophisticated data capabilities that optimizes inventory allocation and dispatch set JOKR apart. We look forward to working with the team on their mission to make retail more instant, more democratic, and more sustainable."
The company obtains its commodities from a variety of local manufacturers and large global corporations, and Wenzel believes that figure will rise significantly. According to Wenzel, this establishes an intriguing dynamic: "a local beer brand, from one day to another, can become as important as a [big global one]".
$430 MILLION AND 2 FUNDING ROUNDS
In terms of funding, JOKR has been able to secure $430 million in total, marking its latest Series B financing in November. New and current investors like Tiger Global, SoftBank, and Balderton, as well as GGV, Monashees, Greycroft, Kaszek, and Activant, are among the 14 investors who are maintaining a high emphasis on JOKR’s performance and this emerging market for online grocery delivery.
Through support from investors, JOKR has crossed the valuation benchmark of $1.25 billion in December 2021. With a post-money valuation of $1.2 billion after Series B funding, JOKR has been given a score of 68.41 by Oddup. While the Oddup score might seem comparatively lower at a glance, considering the short span of existence of the company since last year and its capability to acquire more than $400 million in 2 funding rounds, JOKR has a lot to offer under its sleeves.
"We can already show investors that it’s not just a high-growth business, but one that can run efficiently," Wenzel said in an interview.
SERIES A - $170 MILLION
The fast-growing supermarket and its retail delivery network have secured a $170 million in the Series A investment round. The financing occurred 3 months after the organisation launched operations in the United States, Latin America, and Europe. JOKR's team includes people who founded both Foodpanda and Delivery Hero, so they appear to have the leadership and management skills to grow a major organization.
The financing was headed by GGV Capital, Balderton Capital, and Tiger Global Management. It was backed by Activant Capital, Fabrice Grinda's FJ Labs, Greycroft, as well as Latin America's tech-specialized VC companies, including Monashees, Kaszek, and HV Capital.
"The investment we announced today will empower us to continue our expansion at an unprecedented rate as we continue to build JOKR into the premier platform for a new generation of online shopping, with instant delivery, a focus on local product offerings and more sustainable delivery and supply chains," Wenzel said. "We are proud to be able to partner with such a distinguished group of international tech investors to help us seize the enormous opportunity in front of us," he added.
SERIES B - $260 MILLION
JOKR has secured a $260 million Series B investment, valuing the business at $1.2 billion in less than 6 months after its previous fundraising in July. Existing investors, including GGV Capital, Tiger Global, and Balderton, have all re-joined for the second series, where they are accompanied by Activant Capital, G-Squared, Greycroft, HV Capital, Mirae Asset, Kaszek, Monashees, and Moving Capital.
The additional funding will be used to focus on expanding JOKR’s influence in the United States and Latin America, where it has achieved the most popularity. JOKR already has 200 hubs in 15 cities where it stores and delivers groceries. It intends to expand into other locations in such regions as well as locations inside cities where it currently operates.
With a value of $1.2 billion, the latest round propels JOKR into unicorn territory, and the business bills itself as "one of the fastest companies to reach unicorn status in history."
"We were not planning to raise so soon — we had sufficient capital after raising the substantial round in July," - JOKR’s CEO and co-founder Ralf Wenzel told TechCrunch. "Since then, we built out in so many different countries and began getting a lot of interest in what we were doing. Our existing investors wanted to double down on our phenomenal and healthy growth, as well as new investors. We are now well-capitalized and happy about it."
WHAT'S NEXT FOR JOKR?
JOKR primarily specialises in the instant commerce market, commonly referred to as "dark stores," which is generally described as a business that delivers to clients in 15 minutes or less. To stand out in such a saturated industry, the concept underlying JOKR is an end-to-end experience that controls every stage of the eCommerce value chain. It merges speed, personalisation, local assortment, and sustainability to deliver an unrivalled consumer experience.
JOKR's smaller micro fulfilment facilities, which are purposefully located and developed for its delivery-first strategy rather than in-person, bring supply closer to demand, leading to even speedier delivery and an improved consumer experience.
JOKR now has 200 hubs all across the world, while total order volume is doubling every 2 weeks or so. JOKR is addressing a global marketplace of more than $8 trillion in the grocery and retail space, of which only approximately 3% is currently online, creating a huge potential for the company's growth and prominence in the sector.
We’ve had phenomenal growth in our core geographies," John Ralf Wenzel, CEO and co-founder of JOKR. "That gives a very strong conviction that this will be a business that can be a magnitude larger than what we are today."
Together with business expansion, the organisation stated in an announcement that it intends to invest more in software development, such as its algorithm for forecasting customer orders and preferences, which guides inventory re-stocking and, according to the organization, helps in reducing food waste.
"JOKR has a best-in-class, an experienced team made up of serial entrepreneurs which is well equipped to transform the future of on-demand retail at a global level," stated Alexander Joel-Carbonell, a partner at HV Capital, an investor of JOKR.