French startup Cajoo is raising some money to compete more aggressively in the highly competitive new category of food delivery companies. Interestingly, the main investor in today’s financing round is Carrefour, the supermarket giant. Headline (formerly e.ventures) is also participating in the round, as well as existing investors Frst and XAnge.
Carrefour’s investment is not just a financial investment. Cajoo will take advantage of Carrefour’s purchasing organization. In this way, Cajoo will be able to offer more products to its customers.
Cajoo 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 own inventory of products. Customers can order items without having to think about whether they will be home when delivery is made. About 15 minutes later, a delivery man appears with his purchases.
The startup competes with Getir, Gorillas, Agile, Zapp And some others. It also competes indirectly with traditional retailers and their online ordering systems.
“It’s a category that requires an incredible capital investment,” co-founder and CEO Henri Capoul told me. “We own the entire value chain. If we want to expand, we have to launch hubs, we have to buy products. “
With $ 40 million in his bank account, Cajoo now wants to solidify his strong market position in his home country. The service is currently in operation in 10 French cities: Paris, Neuilly-sur-Seine, Levallois-Perret, Boulogne-Billancourt, Lille, Lyon, Toulouse, Bordeaux and Montpellier.
And yet the company already faces some competition in Paris, for example. But Henri Capoul sees it as a validation of the market. “There are a lot of players who have raised a lot of money. But it is a regulated market. We own all of our products and we have to comply with regulations. We cannot sell everything at a loss, ”he said.
While Henri Capoul expects some form of consolidation in the future, the company is doing everything possible to remain a large and independent company. “The European champions will be national champions first. At this time, some players may overcome the lack of discounted products. I am convinced that the future of this category will be represented by three or four local players who are strong in other countries ”. Henri Capoul said.
Cajoo is currently the only French company operating at this scale in this category. Therefore, it is clear that the company sees itself as the market leader in France first. But the company is already considering other markets as well: Belgium, Italy, Spain, perhaps Portugal or Eastern European countries.
But first, the company wants to grow its team. The number of employees working at the headquarters will double by the end of the year. Operations and delivery teams will also grow dramatically. The company expects five more times by the end of the year on this front.
Some distributors are hired directly by Cajoo. But the company also relies on partners, both contractors and freelancers. So the company faces some of the challenges that Deliveroo and Uber Eats also face.
Cajoo can 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 physical stores in the long run.