French startup Cajoo is raising some cash to compete more aggressively in the new and highly competitive grocery supplier category. Interestingly, the main investor in today’s funding round is Carrefour, the supermarket giant. Headline (formerly e.ventures) is also participating in the round, as are the existing investors Frst and XAnge.
Carrefour’s investment is not just a financial investment. Cajoo will use Carrefour’s purchasing organization. This way, Cajoo can offer more products to its customers.
Cajoo is part of a group of startups trying to create a whole new category of grocery delivery. The company operates dark stores and manages its own inventory. Customers can then order items without having to worry about whether they will be home at the time of delivery. About 15 minutes later, a delivery person will come with your purchases.
The startup competes with Getir, Gorillas, Flink, Zapp and a few others. It also competes indirectly with traditional retailers and their online ordering systems.
“It’s a category that is incredibly capital-intensive,” said co-founder and CEO Henri Capoul. “We own the entire value chain. If we want to expand, we have to set up hubs, we have to buy products. “
With 40 million dollars in its bank account, Cajoo now wants to consolidate its strong market position in its home country. The service is currently active in 10 French cities – Paris, Neuilly-sur-Seine, Levallois-Perret, Boulogne-Billancourt, Lille, Lyon, Toulouse, Bordeaux and Montpellier.
And yet the company is already facing a certain amount of competition, for example in Paris. But Henri Capoul sees it as a market validation. “There are a lot of players who have raised a lot of money. But it’s a regulated market. We all own our products and we have to comply with regulations. We can’t sell everything at a loss, ”he said.
While Henri Capoul expects some kind of consolidation in the future, the company is doing everything it can to remain a large, independent company. “European champions become national champions first. At the moment, some players can overcome a shortage of products with discounts. I am convinced that the future of this category will be represented by three or four local players who are strong in other countries, ”said Henri Capoul.
Cajoo is currently the only French company operating on this scale in this category. It is therefore clear that the company initially sees itself as the market leader in France. But the company is already looking at other markets – Belgium, Italy, Spain, maybe Portugal or Eastern European countries.
But first, the company would like to expand its team. The number of employees at headquarters is expected to double by the end of the year. Operations and delivery teams will also grow quite dramatically. Here the company expects a five-fold increase by the end of the year.
Some deliverers are hired directly by Cajoo. The company also relies on partners – both contractors and freelancers. So the company is facing some challenges that Deliveroo and Uber Eats are also facing.
Cajoo might be a great business idea, but users will have to wonder if it really solves an important need or are they just using it because it exists. Instant delivery companies could have a real impact on brick and mortar stores in the long run.