- 27 January 2021
- Transport / Logistics Services
Finnish same day food and convenience delivery company Wolt has just raised $530 million in a new investment round to expand its business more aggressively.
Even without using a single penny from its recent $100m funding round, Wolt has almost quadrupled its turnover to $345 million in the last 12 months and more than tripled its staff to 2,200 working in 129 cities in 23 countries.
“Covid has changed our perspective on how big a business like us can be,” says Miki Kuusi, Wolt’s CEO and cofounder.
One of its key focuses is growing outside of restaurant food delivery, with the idea to include a full range of retail products – not unlike Amazon.
“The opportunity is to equip brick and mortar stores to compete with Amazon and Alibaba — and be better than them,” says Kuusi.
As a first step the company is looking to get a solid foothold in the grocery delivery market.“Grocery is the first and most important priority,” says Kuusi. “There’s a lot of complexity and the margin structure is tough. You need tech for the picking up process, there’s catalogue management, expiration dates.”
“It’s the natural expansion from restaurants,” says Kuusi. “It forces us to build the tech that will support all the other retail categories as well — electronics, flowers, clothes — much easier categories, but where the underlying frequency is lower.”
The Wolt business model differs significantly from Glovo, its direct European competitor, which is focusing on ‘dark store’ urban fulfilment centres. Instead, Wolt is aiming at delivering direct from convenience and grocery stores. Wolt does operate dark stores but nothing like the 100 in number that Glovo does.
“Our preferred model is to work with partners,” says Kuusi. “Partners can provide as good an experience and efficiency as dark stores.” Wolt now has 1,500 retail partners, big and small, including Spar in Poland, Carrefour in Georgia and ICA in Sweden.
The orders Wolt takes differ in size too, from small takeaway food packages to large family weekly shops. It is flexing its offering too, recognising that a family food shop won’t be required in half an hour as a hot takeaway might be.
The last funding round was during the first phase of the global pandemic and Kuusi says that it was raised largely as an insurance against economic uncertainties. It hasn’t used a penny of it. Now the firm is planning an IPO and has raised a further $530m in a funding round led by ICONIQ Growth. The other investors are Tiger Global, DST, KKR, Prosus, EQT Growth and Coatue. Existing investors 83North, Highland Europe, Goldman Sachs Growth Equity, EQT Ventures and Vintage Investment Partners.