Grocery deliverer JOKR doubles down on Brazil as it secures $50M on a $1.3B valuation.
According to TechCrunch, instant grocery delivery company JOKR has raised approximately $50 million in a Series C investment on a $1.3 billion post-money valuation. The funding, which G Squared led with participation from GGV Capital, Tiger Global Management, and HV Capital, was buoyed by existing investors. JOKR has raised $480 million in equity and debt since its founding in 2021.
JOKR’s co-founder and CEO, Ralf Wenzel, explained that the new funding would help the company become fully self-sustainable and less dependent on external capital. The company has had a challenging year, with The Information reporting that JOKR was losing $10 million a month at one point. Wenzel confirmed that the company is still losing money, but the losses have narrowed to single-digit millions of dollars each month.
JOKR hit gross-profit status last April, but the instant grocery delivery sector faced a challenging economic environment in part due to people returning to grocery shopping in person as the pandemic eased, a slowdown in venture capital investments, and the war in Ukraine. As a result, JOKR announced that it would shutter its New York and Boston deliveries at the beginning of summer 2022, citing global economic uncertainty. JOKR has since left Colombia after closing locations in Medellin and Santiago, Chile, in November. The company continues to operate in Brazil, Mexico, and Peru but is discussing strategic options for both markets to foster its focus on the Brazilian market.
Wenzel explained that JOKR’s decisions regarding which markets to focus on are derived from an ongoing assessment of its different business units and determining where JOKR has the best chance at balancing growth and profitability. He added that the instant grocery delivery sector is not a “winner takes all market” but more like a “‘winner takes most market.'”
Despite the challenges, Wenzel remains optimistic about JOKR’s future. He believes that JOKR’s focus on profitability over geographic spread and customer experience will help the company succeed. JOKR consistently has a Net Promoter Score above 80, and Wenzel believes that the company is building a new generation of retail through vertical integration and superior data science and technology. JOKR achieved total operating leverage with positive gross margins within just one year and has kept growing ever since.
The instant grocery delivery sector peaked during the global pandemic when fewer people left their homes. Startup companies were coming online in droves and attracting some serious venture capital. However, as the virus became something we all had to learn to live with, people returned to their normal in-person grocery shopping behaviors. This left much of the quick-commerce sector to determine if their business models could survive in a crowded space just as capital became scarce.
Unfortunately, announcements of companies buckling against the strain and being acquired or folding over the past year resulted. For example, Buyk, Fridge No More, and Zero Grocery ceased operations, with Zero doing so just weeks after announcing a new funding round. We also saw some giants, like Gopuff, announce staff reductions, as did Zapp.
JOKR’s focus on profitability and customer experience may give it an edge in a challenging market. The company’s ability to achieve positive gross margins within just one year and continue growing may also be a positive sign for its prospects.
The article is “Grocery deliverer JOKR doubles down on Brazil as it secures $50M on $1.3B valuation.“