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LONDON – US grocery delivery start-up Gopuff on Thursday agreed to take over Dija, a British competitor founded just eight months ago.
Gopuff said the move would help it grow in Europe, establishing a larger presence in the UK and entering France and Spain.
The company acquired Fancy, a similar UK-based start-up, just three months ago.
Founded in December by former employees of UK food delivery company Deliveroo, Dija is part of a new generation of startups promising to get groceries to people’s doors in minutes.
These companies have grown rapidly over the past year, aided by billions of dollars in venture capital. Dija has raised $ 20 million in seed capital from Index Ventures, Blossom Capital and Creandum.
Other competitors include Getir, a Turkish company recently valued at $ 7.5 billion, and German start-ups Gorillas and Flink.
Grocery delivery start-ups flourished during the Covid-19 pandemic, as people turned to online platforms to order their essentials rather than in stores.
Dija and his rivals use what are called “dark stores,” small warehouses where couriers go to collect and deliver items ordered by customers. Businesses buy products wholesale and sell them through an app, often at a price higher than supermarket prices.
Industry experts have questioned the sustainability of newcomer business models. The market is very crowded and requires heaps of money to gain scale.
“The amount of money put against this opportunity is grossly out of proportion to the size of the opportunity,” Luke Jensen, CEO of Ocado Solutions, a unit of British grocery technology pioneer Ocado, told CNBC. , earlier this year.
“I suspect there will inevitably be a lot of consolidation among these players,” he added.
It seems that the industry is already starting to consolidate. Getir recently acquired a competitor in southern Europe called BLOK. And Flink is said to have sparked interest from Amazon and Gopuff.
Gopuff’s acquisition of Dija is expected to be finalized within 30 days, the US company said. Financial terms were not disclosed. It’s an unusually quick exit for a venture-backed startup.
The deal is expected to give Gopuff a much wider reach in Europe, operating around 40 dark stores and employing 200 people.
“The combination of Dija’s team of industry veterans, extensive infrastructure and local expertise will complement Gopuff’s proprietary technology and unique customer experience, and advance our ability to scale rapidly as we are creating a leading platform in Europe, ”said Daniel Folkman, senior vice president of corporate Gopuff.
It is not clear whether any Dija employees will be made redundant as a result of the takeover. A spokesperson for Dija was not immediately available for comment when contacted by CNBC.
Gopuff, which is backed by SoftBank, raised $ 1 billion last month in a funding round valuing the Philadelphia-based company at $ 15 billion.
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