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Glovo bags two grocery picking and delivery startups

More startup swapping in the food delivery space: Spain’s Glovo, an on-demand delivery platform which operates a network of dark stores focused on urban convenience shopping, is pushing deeper into planned grocery shopping — announcing the acquisition of two regional ‘Instacart-style’ grocery picking and delivery startups, Madrid-based Lola Market and Portugal’s Mercadão.

Terms of the acquisitions are not being disclosed.

2015-founded Lola Market had raised around €3M, per Crunchbase. It’s not clear how much Portugal’s Mercadão — which was founded in 2018 — had raised over its shorter run.

Glovo, meanwhile, raised a meaty $528M Series F back in April — but quickly splurged $208M to pick up three food delivery brands from rival Delivery Hero in Central and Eastern Europe.

The Spanish on-demand delivery platform is facing challenges to its model on home turf where the government has applied a labor reform aimed at delivery workers in the gig economy.

The reform, agreed earlier this year, came into application last month — recognizing delivery platform riders as employees, or at least on paper.

Glovo responded by imposing a new self-employment model on the vast majority of riders on its platform, hiring only around a fifth. So the scene looks set for legal challenges in its home market.

At the European Union level, lawmakers are also eyeing how to improve conditions for platform workers — and could come with pan-EU legislation that has wider implications for the business models of regional players like Glovo.

Ongoing regulatory challenges over employment classification and algorithmic management of workers in the gig economy may offer some context for Glovo’s expanding interest in grocery purchasing in Europe, where it has been building out a network of dark stores to power what it calls ‘Q-commerce’ (aka, quick urban convenience shopping).

As well as for its recently announced international expansion in Africa, where it has said it will be doubling down investment over the next 12 months.

But also the challenge of hitting profitability for pure on-demand food delivery looks like a sizeable piece of the puzzle here that’s driving consolidation.

By adding players in the supermarket and retail outlet picking delivery space, Glovo expands its coverage of shoppers’ needs — and can nudge users to spend more by being able to cross-sell them on planned purchases (such as the weekly grocery shop), as well as what it bills as “emergency essentials” and “fast action convenience” powered by the more limited inventory it can offer in its city center dark stores.

Both Lola Market and Mercadão’s brand identities will be retained, per Glovo, which also says they will operate independently — led by Gonçalo Soares da Costa, CEO of Mercadão.

It touts the acquisitions as strengthening its competitive position in Europe in “key markets” — going on to suggest it will add grocery picking and delivery across its entire market footprint, with an initial expansion planned for Poland and Italy.

Also today it said its Q-Commerce division is “on track” to reach an annual Gross Transaction Value (GTV) of more than €300M this year — adding that it expects that to more than triple by the end of 2022, projecting it will surpass a run rate of €1BN.

Commenting on its latest acquisitions in a statement, Oscar Pierre, CEO and co-founder of Glovo, added: “We see huge potential in the on-demand groceries marketplace and both companies are strong local players in their respective markets, and further strengthen our Q-Commerce offering.

“With Lola Market and Mercadão on board, we can build stronger partnerships with retailers, offer our users big-basket purchases and provide a more complete service. These acquisitions represent a significant step forward for us, as we’re now able to cover all of the main purchasing considerations for groceries customers, making Glovo a one-stop-shop for e-groceries.”

Source Link Glovo bags two grocery picking and delivery startups

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