Cajoo raises $40 million for its instant grocery delivery service – TechCrunch

by Jeremy

French startup Cajoo is raising money to compete more aggressively with the new, highly competitive food delivery companies. Interestingly, the lead investor in today’s funding round is Carrefour, the supermarket giant. Headline (formerly also participates in the game, and existing investors First and XAnge.

Carrefour’s investment isn’t just a financial investment. Cajon will take advantage of Carrefour’s purchasing organization. This way, Cajon will be able to offer more products to its customers.Cajoo

Cajon is part of a group of startups trying to create a whole new category of grocery deliveries. The company operates dark stores and manages its inventory of products. Customers can then order items without thinking about whether they’ll be home when the delivery happens. Around 15 minutes later, a delivery person shows up with your groceries.

The startup competes with Getir, Gorillas, Flink, Zapp, and others. It also indirectly competes with traditional retailers and their online ordering systems.

“It’s a category that is incredibly capital intensive,” co-founder and CEO Henri Capoul told me. “We own the entire value chain. If we want to expand, we have to launch hubs and buy products.”

With $40 million in its bank account, Cajoo wants to solidify its strong market position in its home country. The service currently lives 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 some competition in Paris, for instance. But Henri Capoul sees it as market validation. “A lot of players have raised a lot of money. But it’s a regulated market. We own all our products, and we have to comply with regulations. We can’t sell everything at a loss,” he said.

While Henri Capoul expects consolidation, the company is doing everything to remain a significant, independent company. “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 strong local players in other countries.” Henri Capoul said.

Cajoo is currently the only French company operating at this scale in this category. So it’s clear that the company sees itself as a market leader in France first. But the company is also looking at other markets — Belgium, Italy, Spain, Portugal, or Eastern European countries.

But first, the company wants to grow its team. The number of employees working in the HQ will double by the end of the year. Operations and delivery teams will also grow quite drastically. The company expects a fivefold increase on this front by the end of the year.

Cajoo directly hires some delivery people. But the company is also relying on partners — both contracting companies and freelancers. So the company faces some of the challenges that Deliveroo and Uber Eats face.

Cajoo might be a great business idea, but users will have to ask themselves whether it solves a critical need or they’re just using it because it exists. Instant delivery companies could have a tangible impact on brick-and-mortar shops over the long run.

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