In Helsinki it is snowing, but that does not stop the local food supply company Walt. It only raised $ 530 million in a round that led ICONIQ growth to expand the fast-growing retail delivery service.
This time last year, Walt had 700 employees, operated in 20 countries and reported a turnover of 87 million euros in 2019. Now, it is in 23 countries and in 129 cities, employs more than 2,200 workers and saw triple revenues in 2020 to $ -345 million. It also has a growing network of retail partners in almost all of the company’s markets, and has begun preparing for an IPO.
“Covid has changed our perspective on how much a business like us can be,” says Mickey Cozy, CEO and founder of Walt.
So, how big is it big?
The gold mine of the grocery store
Like many of its competitors, Walt is expanding beyond food delivery to restaurants. It wants to use its logistics network and technology to cater to all kinds of retail – from medicine to pet food to cosmetics.
“The opportunity is to equip brick and mortar stores to compete with Amazon and Alibaba – and be better than them.”
“The opportunity is to equip brick-and-mortar stores to compete with Amazon and Alibaba – and be better than them,” says Cozy.
But Walt is still not getting Amazon out of business. It needs to crack the grocery delivery first.
“Grocery is the first and most important priority,” says Cozy. “There is a lot of complexity and the structure of the margins is difficult. You need technology for the collection process, there is catalog management, expiration dates.”
It’s also food still – people need it all the time (unlike trainers and flowers), so the frequency of delivery is high.
“This is the natural expansion from restaurants,” says Cozy. “It forces us to build the technology that will also support all the other retail categories – electronics, flowers, clothing – much lighter categories, but when the underlying frequency is lower.”
Affiliates vs. Dark Stores
In contrast to Spanish competitor Globe, which last week announced opening plans 100 ‘Dark Stores’ By the end of the year, Walt is not so keen on getting into the retail buying business. (It currently has less than 10 dark stores of its own).
“Affiliates can provide a good experience and efficiency like dark stores.”
“Our preferred model is to work with partners,” says Cozy. “Affiliates can provide a good experience and efficiency like dark stores.” Walt now has 1,500 retail partners, large and small, including Spar in Poland, Carrefour in Georgia and ICA in Sweden.
With some of these partners Walt collects small shipments that need to be filled quickly. (Usually faster deliveries are easier and faster than restaurant food deliveries, says Kuusi, because there is no need to take into account the time required to cook the food, and it is easier to stack and pack cans than hamburger boxes.)
With other partners, such as supermarkets, Walt picks up more complex and larger orders worth hundreds of euros. With these shipments, he says, “speed is not everything” – people are likely to need (or expect) their weekly supermarket to be delivered within half an hour.
This means that even though Walt charges less for these ‘big basket’ orders than for delivering food to restaurants (which is north of 20%), it’s good business. There is more flexibility in timings and the average order value tends to be much higher.
Walt is still opening some of its own dark stores, if only to figure out how to make them work best. “The reason we work on dark stores ourselves is the development of technology – and because sometimes it’s not the fastest thing to work with partners.”
Why grow now?
Walt’s latest fundraiser comes amid a plethora of shipping activities. Along with Globo A $ 100 million deal With the Stonewag real estate platform for opening 100 dark stores (with Globo managing the delivery operations, and Stonev building and renovating the stores), Deliveroo also Raised $ 180 million And reached a value of $ 7 billion. And Turkish fast-start-up Getir is Reported that he is also raising capital, And expansion into new markets, including London.
“When we started uploading this round, we had no idea what the competition was doing,” says Cossi, who set out to upload in late October. “It’s more us who thought, how can we optimize for the next three to five years?”
The last time Walt raised capital, the group’s motives were very different. In May 2020 it raised € 100 million in a round led by Goldman Sachs Capital Growth. “It was insurance we took out for the uncertainty in the world,” says Cosi – at this point, many restaurants were still closed and it was unclear whether the epidemic would slow the company’s growth.
“We did not use a single euro from the funding raised in the spring.”
it was not; It accelerated it. “As a result, we did not use a single euro of funding raised in the spring,” Cossi says.
Alongside ICONIQ growth, which led the round, include Walt’s new investors Tiger Global, DST, KKR, Prossus, EQT Growth and Coat. Existing investors 83 North, Highland Europe, Goldman Sachs Capital Growth, EQT Ventures & Vintage Investment Co. also participated in the round.
Aside from building a retail shipping empire, they also advised Walt on its way to the IPO.
“We started the readiness process after the last round,” says Cossi, who is currently employed as chief financial officer to bolster those efforts. “It’s an interesting thing – how you build the government, the practices and the processes that will be publicly recorded.”
It’s a very different kind of CEO role than when he first started Walt in 2014, he says – but that’s what he likes. “For me the excitement is always to jump to the next jump. the time. “
Amy Levin is Sift’s deputy editor. It covers VC, mobility and technological diversity, and tweets from @Amirlevin.