Even with billion dollar behemoths already in the food delivery market, Helsinki-based food delivery app Wolt has managed to raise $11 million fresh funding from heavyweight Nordic investors including the founder of Skype and the chairman of Nokia as the company announced its Stockholm launch on Friday.
“We are now expanding in the Nordics and in the Baltic region. The funds go to the expansion – hiring the launching teams for the new cities and expanding within new countries – and product development at the HQ,” said Juhani Mykkänen, Wolt’s COO and co-founder.
EQT Ventures led the new round with new high profile backers Niklas Zennström, the founder of Skype and Ilkka Paananen, the CEO of Supercell. Nokia’s chairman Risto Siilasmaa who participated in the company’s previous round, was part of the illustrious investor lineup.
As a result of the new investment, Kees Koolen, the former CEO of Booking.com will join the company’s board of directors.
In all, Wolt has raised $14 million.
Wolt’s previous rounds included Inventure, Lifeline Ventures, Pii Ketvel, Supercell co-founder Visa Forsten and Poju Zabludowicz, a real-estate tycoon and one of the wealthiest people in Finland.
Food delivery space heats up
Wolt operates in a crowded space with companies such as Delivery Hero – valued at $3 billion, – Just Eat, Take Eat Easy, Deliveroo, Grubhub, Seamless and Foodora all competing for the market share.
“There are a number of more established players globally. I’d say our biggest competitor is really the corner grocery store where people go every week without really thinking about it. The food industry is around 0.5% digital in any form (US data). I’d say it’s a pretty unexplored market still outside delivery of pizza,” said Miki Kuusi, the CEO and co-founder of Wolt.
The delivery space has attracted big investments recently with Alibaba investing $900 million on Chinese food-delivery app Ele.me and earlier in April, London-based on-demand delivery service Jinn picked up $7.5 million. In late March, French delivery service Frichti raised $13.4 million to invest in its own infrastructure to serve more clients.
Although Wolt faces some formidable competition, the company has achieved a significant market share in Finland, a country of only 5.4 million people.
“We have 100 000 registered users and 450 restaurants,” Mykkänen said.
That matters in a local market in the frozen North, where delivery apps are a shoo-in for cities and countries – such as Finland – with long winters and comfort-loving populations.
The US alone has a bustling $70 billion takeaway and food delivery market of which only $9 billion is currently online.
Wolt, like most delivery apps, takes a cut from each delivery.
“We take a cut of a few percent for every takeaway transaction and a larger cut for every delivery transaction. There are no monthly fees or signup fees for the merchant. For the customer the app is free and everything costs the same than in the restaurant”, said Mykkänen.
As part of Friday’s investment news, Wolt also announced its expansion to Stockholm where it will start with 32 restaurants. Stockholm is the company’s first city outside of Finland.
“We have a great launch team now in place in Stockholm and are looking to hire people in other Nordics as well. It’s an exciting time for us”, said Kuusi.