Spain’s Glovo, an on-demand delivery app, has announced a strategic partnership with Swiss-based real estate firm, Stoneweg.
The deal will see the latter invest €100 million in building and refurbishing “prime city real estate” in some of Glovo’s key markets as the delivery app works to build out its network of dark stores and sign up more retail partners for its urban delivery service, it said today.
The initial focus for the partnership will be on growing its dark stores network in Spain, Italy, Portugal, Romania, with additional countries slated as under review in Europe.
“These are the countries in which both Glovo and Stoneweg have a major presence, and therefore are able to move much quicker when it comes to setting up,” a Glovo spokeswoman told us. “However, the deal is not limited to these countries. Glovo’s aim is to grow and strengthen their Q-Commerce and dark kitchens infrastructure across Eastern Europe too.”
Glovo currently operates 18 dark stores globally — in cities including Barcelona, Madrid, Lisbon and Milan — but said it’s now looking to open similar stores in Valencia, Rome, Porto and Bucharest, among others.
It wants to have 100 dark stores up and running by the end of 2021, it added.
Last September the startup announced the sale of its LatAm ops to food-delivery focused rival Delivery Hero for $272 million — leaving it more fully focused on Southern and Eastern Europe.
Then in November it announced the launch of a dedicated business unit to support expansion of the sub-30 minute urban delivery service, which it calls “Q-Commerce” (that’s “Q” for quick) — saying it would accelerate development of a B2B offering to stock third parties’ products in its city center warehouses (and have them delivered to shoppers via the couriers doing gig work on its platform).
Glovo said today that the Stoneweg strategic partnership will help it step on the gas to grow the infrastructure and fulfilment centers it needs to underpin this B2B offering.
The “deliver anything” app is spying an opportunity to capitalize on the coronavirus’ impact on traditional bricks-and-mortar retail — betting urban consumers will make a permanent shift to outsourcing grocery and other convenience/essential shops to an app which bundles high speed delivery, rather than making such trips in person.
Its dialled-up focus on Q-Commerce is a direct response to “changing consumer sentiment and demand for instant and same-day delivery”, it added.
To date, Glovo’s platform has delivered more than 12 million multi-category orders globally, while in 2020 it experienced a growth rate of more than 300% year-on-year.
As well as supermarkets such as Carrefour, Continente, and Kaufland, Glovo’s list of retail partners includes the likes of Unilever, Nestle and L’Oréal, and IKEA — so it’s by no means focused purely on groceries.
It has said it wants Q-Commerce to power delivery of a wide range of products — from toys, music, books, flowers and beauty products to pharmacy items and groceries. And even, in some markets, a curated selected of IKEA wares — i.e. stuff that’s small enough to fit in couriers’ backpacks.
Commenting on the Stoneweg strategic investment in a statement, Oscar Pierre, co-founder and CEO, said: “We believe that the third-generation of commerce is already upon us. Following the close of Stoneweg’s investment, we are consolidating our strategic commitment to Q-Commerce, which will allow us to better connect people with a wide variety of available products in their cities.
“In the wake of COVID-19, we believe that dark stores represent the future of post-pandemic retail, and I think we’ll see a permanent shift in consumer habits towards same-day and instant delivery. We’re excited to continue to expand our offering, so that all types of businesses, from local independent stores to multi-national chains, can reach more and more customers thanks to new technological solutions and highly efficient infrastructure.”
In another supporting statement, Stoneweg’s Joaquín Castellví, founding partner and head of acquisitions for Europe, added that the strategic investment represents “an opportunity to offer our clients to diversify into a new class of retail asset through consolidated cities where Glovo operates — in a segment with great growth potential, accelerated by the situation we are experiencing”.
Glovo’s push to take a margin on a broad range of urban retail comes at a time when consolidation is eating into the thin margin food delivery space.
It is also facing legal challenges to its business model in Europe over the classification of couriers as self-employed — losing a supreme court ruling in its home market last September.
Ministers in Spain are working on a new regulatory framework for delivery apps and Glovo has said it’s awaiting that reform before making any changes but a lot will be riding on the detail.
UK-based Deliveroo also recently lost a legal challenge in Spain over the classification of its couriers. A court in Barcelona found last week that the company had falsely defined 748 riders as self employed, following a 2018 workplace inspection.
The delivery platform which competes with Glovo in the on-demand food and grocery space, announced Sunday the closing of a Series H funding round — raising $180M+ from existing investors, led by Durable Capital Partners LP and Fidelity Management & Research Company LLC, which it said valued the business at over $7BN.
The investment would enable Deliveroo to continue investing in “developing the best proposition for consumers, riders and restaurants”, it said, noting that it would be expanding in on-demand grocery following “rapid” growth over the last year.
Deliveroo added that the Series H investment comes ahead of a “potential” IPO — and said it “reflects strong demand from existing shareholders to invest in the company, given the significant growth potential in the online food delivery sector in which consumer adoption is accelerating”.