Will Carrefour-Backed Cajoo Have a Real Impact on Grocery Shopping in France?

Oddup Team
October 25, 2021

Online grocery shopping grew 55% since 2020 as people were forced to stay and eat at home.

In France, several supermarkets, hypermarkets, delis, and specialist stores became accessible to people through online delivery services.   The demand backed by COVID-19 restrictions has caused the online groceries delivery market to evolve and expand. 

France based Cajoo was co-founded in 2020 by Henri Capoul, Jérémy Gotteland, and Guillaume Luscan. It is an early-stage venture company that operates as an online grocery delivery platform that efficiently fulfills on-demand shopping deliveries through their mobile  application. 

Here is ther story,

Capoul’s Departure from Bolt and Starting the Grocery Delivery Startup, Cajoo

Despite being a relatively new name among dozens of online grocery delivery companies,. Behind Cajoo, are Henri Capoul, Guillaume Luscan, and Jérémy Gotteland.

Henri Capoul, a graduate from one of the “grandes écoles”, ESCP Business School spent 4 years working as a consultant with McKinsey & Company. At McKinsey, Capoul met Guillaume Luscan and the two of them worked on their analytical skills. The duo remained close friends even after Capoul left the company to join Respire, a French D2C brand. It wasn’t long before Capoul learned how one could deploy a brand instantly against all odds despite having Big Tech competitors.

The idea of creating Cajoo came to be,  when Henri Capoul was associated with Bolt, a aan Estonia-based carpooling unicorn startup. During his time working at Bolt Capoul learned extensively about logistics and things about running a large-scale marketplace. It was around that time when Capoul became known for being a strategic thinker with high intellectual capability. 

Capoul crossed paths once again with Luscan, his old friend, and ex-colleague with whom he shared the idea of creating Cajoo. But the duo lacked the technical capability to make their ideas come to life. In pursuit of a technical co-founder, Capoul and Luscan met with Jérémy Gotteland, a talented full-stack software engineer and mobile development expert. Gotteland brought the technical expertise required to build Cajoo’s delivery application and state-of-the-art web platform.

“You need to expand quite fast to propose the service to new customers before the competition does, and since competition is quite intense you need to be able to be quick, it’s a very capital-intensive activity and I think that’s why all the players are consistently discussing with inventors to make sure that cash will never be an issue.”- Cajoo co-founder Guillaume Luscan said.

The reason why investors find Cajoo to be such a promising opportunity is partly due to the seasoned team of leaders holding the reins of the company. The three of the Cajoo co-founders have acquired several years of experience in logistics, analytics, and decision-making throughout their respective careers. Even though Cajoo faces challenges like high costs and intense competition, the trio of co-founders believes that it could be solved by achieving consistent financing. 

Aspects that make Cajoo Unique

On the Cajoo website, users can find anything that they would normally do at a local grocery store including pasta, toiletries, and even candies. Beverages like wine & beer and snacks are also available through Cajoo. “It’s a category that is incredibly capital intensive,” co-founder and CEO Henri Capoul said. “We own the entire value chain. If we want to expand, we have to launch hubs, we have to buy products.”

This year, Cajoo launched the first version of free application for instant grocery deliveries. The app, as designed and implemented according to Jérémy Gotteland, the CTO of Cajoo, can be downloaded for both Android and Apple devices. Cajoo is integrating more technical aspects in its business model to grab the attention of online consumers and leverage their shopping habits. For example, Flash sales on items that shoppers are interested in buying and discounts on items that they put in their cart for a certain amount of time.

The company has its own micro-fulfillment centers where it handles, stores, and packs inventory products.  These warehouses are meant to handle pickup and deliveries. The inventory of these warehouses is operated, monitored, and organized by the team. 

This makes Cajoo’s business model different from a marketplace model which is a unique feat in this sector. In a typical  marketplace model, buyers and sellers join a third party platform to interact with each other to fulfill the demands of the buyers. The operator of such a marketplace gains from all the value creation that occurs on their platform.

Cajoo does not earn entirely through the delivery fees paid by the customers because that is simply the minimum fee for ordering one item at any time. In reality, the company is mainly profited by getting margin from grocery products just like a retailer does. 

Market Growth, Competitors, Investors, and Partners

Cajoo currently delivers in 10 French cities including Paris, Nice, Levallois-Perret, Boulogne-Billancourt, Neuilly-sur-Seine, Lyon, Lille, Bordeaux, Montpellier, and Toulouse. Cajoo competes with  Amazon Prime services in the French localities that take at least 2 hours to deliver groceries and everyday products. Delivering the same items from the Cajoo app and website would save people an hour and 45 minutes, which is tempting enough to give it a try and get hooked on it.

“There are a lot of players that have raised a lot of money. But it’s a regulated market. We own all our products and we have to comply with the regulation. We can’t sell everything at a loss,” Henri Capoul said.

Despite being one of the first on-demand grocery delivery services in France, Cajoo is facing tough competition from alternatives like Deliveroo, Getir, Gorillas, Flink, and Zapp. But the company is slowly getting more and more popular especially after receiving financial backing from a leading food retailer and a multinational company, Carrefour. A spokesperson of the company has stated that Cajoo is looking at a lot of financial possibilities in the near future.

“We don’t want to have the same standards as Deliveroo or Uber Eats. Recruiting the right delivery people, making sure that they have work permits are important topics,” Cajoo CEO, Henri Capoul said.

The online grocery delivery market in France is a competitive one where companies like Glovo, a pickup in-store service, end up shutting down as they fail to get sufficient margins. Offline retailers are also gearing up to give online alternative services a tough time in days to come. But the Cajoo cofounders seem excited rather than being intimidated by this news. 

Given the hypermarket module followed in France, it makes a perfect backdrop for Cajoo to become a leader in instant grocery deliveries. As there are no pure players in the case of instant grocery delivery, it presents a once-in-a-lifetime opportunity for Cajoo to dominate the market by becoming a leader and trendsetter. 

“Ultimately, it’s about understanding what they potentially offer compared to the offerings of VCs,” said Guillaume Luscan, COO, and co-founder of the company, when asked about potential discussions with competitors. “All of the options are at least worth taking a call, and then it’s basically a matter of weighing what is best for Cajoo and what the vision is. “

The recent funding received from investors like Carrefour, XAnge, and others has given Cajoo a much-needed boost to reach new heights of technical, analytical, and logistics expertise to make online grocery deliveries more accurate and convenient for people living in 10 of the most densely populated cities. The full-stacked and tech-intensive model of Cajoo is best-suited to gain traction in cities where retail innovation is on the rise.

“Carrefour has a lot of assets, assortment, logistics, knowledge,” says Cajoo co-founder and CEO Henri Capoul. “But they don’t have the technology.” “The differentiating factor of our model is that we offer products at market price. It’s the same price as a Monoprix or Carrefour Express store with delivery fees under €2,” he added.

Cajoo app has included Pierre Entremont (cofounder and partner at Frst), Cyril Bertrand (Partner at Xange Capital), and Elodie Perthuisot (Executive Director E-Commerce, Data and Digital Transformation at Carrefour) into their board as partners. These brilliant individuals would help Cajoo grocery delivery to become a premier company in France by making use of their years of experience and business-centric skillset. 

Cajoo grocery delivery is relying on its partners which includes both contracting companies as well as freelancers to observe a fivefold increase by the end of 2021. Cajoo directly hires a significant part of the delivery team.

Cajoo co-founders are aiming to expand slowly into other nearby eastern European markets like Italy, Spain, Belgium, and maybe Portugal. But the first priority for the company is to grow the team size. At the time of writing headcount at Cajoo is between 51 and 100. 

$47.2 Million and 2 Funding Rounds

Since Cajoo was founded last year, it has successfully completed two funding rounds which included 3-5 leading investors. The total amount raised through these funding rounds is approximately $47.2 million which brings Cajoo’s benchmark valuation to $400 million (as of 9th September 2021). The seeding funding round of Cajoo was announced back in February this year and after 7 months they raised more financial support from new and existing investors in the Series A round (led by Carrefour).

 “We are delighted with this structural partnership with Carrefour, which will help us shore up our leadership position in quick commerce in France and speed up our development in Europe. Cajoo will be able to offer a completely new consumer experience thanks to its agility and technology, bolstered by Carrefour's logistics and operational expertise", said Henri Capoul, co-founder and CEO of Cajoo.

The previous valuation of the instant grocery delivery platform was $360 million which then turned to $400 million as the Series A funding round closed. As a result of Oddup’s meticulous algorithmic research, Cajoo receives an Oddup score of 61.37. This unique metric is a representation of the overall health of an active organization which partially indicates how well any particular company would perform in its relevant industry.

Seed - $7.2 Million

The seed  funding round was raised in February and closed after raising a total of $7.2 million. Around the same time, Cajoo released its multifunctional smartphone application for users. The seed round was mainly led by Frst and XAnge but other investors like Yan and Othmane, the cofounders of Uber’s competitor, ChauffeurPrivé (now known as Kapten) also recorded their participation. The CEO, Henri Capoul said at the time that Cajoo requires around 10 micro-fulfillment centers so as to service all over Paris. It took a few months for the company to achieve that as the economic crisis left countless empty garages and warehouses for utilization.

Series A - $40 Million

The Series A funding round held by Cajoo was announced after a gap of a total of 7 months. This time around, the goal of raising funds from interested and well-established investors was to be able to compete with the new and innovative food delivery companies. Surprisingly enough, the Series A funding round was joined by none other than Carrefour, a global retail company and a supermarket conglomerate. The existing investors like Frst and XAnge also participated in the funding round held in September.

“Carrefour’s investment in Cajoo is a new milestone in the Group's digital roadmap. Quick commerce is an underlying market trend that emerged during lockdown and is now increasingly established in consumers' habits, in all of Carrefour’s geographies. As the leader in home delivery in France, Carrefour is capturing this new trend and is exploring with Cajoo all value-creating strategic opportunities on this new high-growth segment", said Elodie Perthuisot, the Carrefour Group's Executive Director of E-Commerce, Data, and Digital Transformation.

Carrefour did not only make a financial investment in Cajoo but also enabled the company to utilize their purchasing organization so that the grocery delivery service can offer more products than before. Cajoo has also promised to double its headcount across operations and delivery by the end of this year.

What Does the Future Hold for Cajoo?

Even though shops and restaurants have started to reopen but the pandemic has changed a few buying habits of consumers for good. According to its co-founder and CEO Henri Capoul, Cajoo is the only French company operating at a massive scale in its relevant category at the moment.

“I genuinely believe it’s a once-in-a-generation spending shift from offline to online, and Covid’s’s just accelerated that,” says Alec Dent, co-founder, and COO of Weezy (a competitor of Cajoo)

The recent Cajoo Carrefour exclusive industrial collaboration has generated a positive buzz surrounding the grocery delivery platform. Cajoo already has more than 100,000 loyal users thanks to its express delivery service. But the real question that investors and partners are asking themselves is that where does Cajoo stand in the long run when COVID-19 becomes a thing of the past?

“European champions will be national champions first. Right now, some players can overcome a lack of products with discounts. I’m convinced that the future of this category will be represented by three or four local players that are strong in other countries.” Henri Capoul said.

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