Meet Cajoo, a new French startup that has raised a $7.3 million (€6 million) funding round. The company wants to make it easier to order groceries from your phone and receive them 15 minutes later. It is launching in Paris today.
“I left Bolt around mid-August and I’m launching a company with two co-founders focused on 15-minute deliveries,” co-founder and CEO Henri Capoul told me. Thanks to his experience at Bolt, he probably knows a thing or two about logistics and operating a marketplace at scale. Guillaume Luscan and Jeremy Gotteland are the two other co-founders.
What makes Cajoo different from what’s out there? In France, there’s no Instacart or pure player in the grocery delivering space. Instead, many supermarket chains already offer deliveries. You can order from their website or app and get your groceries the next day or two days later.
Some retailers are trying to speed things up a bit, such as Carrefour with its Livraison Express service and Monoprix with Monoprix Plus. Amazon can also deliver some groceries through its Amazon Prime Now sub-service. It can take 30 minutes, an hour or even two hours before receiving your order though.
But people want things now, as the success of Deliveroo, Uber Eats and others has shown. I think impatience is unsustainable because of unit economics, labor laws, the impact on small shops and cities. And yet, it seems likely that there’s enough demand for Cajoo.
The startup wants to differentiate itself with a full-stack approach. Cajoo operates its own micro-fulfillment centers. It has its own inventory of products. It manages the fleet of delivery people as much as possible. And, of course, it sells directly to customers.
Glovo offered grocery deliveries from your local grocery store. But the company pulled back from the French market a few weeks ago. It seems like it couldn’t generate big enough margins by buying from stores directly. In Spain, Glovo focuses on its own dark stores.
On Cajoo, you’ll find anything you could find in a local grocery store — pasta, shampoo, candies, you name it. You’ll be able to order wine, beer and snacks — Uber proved that it can be a lucrative segment with its acquisition of Drizly for $1.1 billion.
And it is launching today in Paris in the 9th arrondissement and around. Overall, Cajoo thinks it’ll require 10 micro-fulfillment centers to cover Paris and it’s going to take a few months.
Cajoo is also benefiting from the current economic crisis as there are a ton of empty stores, empty garages and small warehouses that are currently waiting for a new owner.
“The differentiating factor of our model is that we offer products at market price. It’s the same price as a Monoprix or Carrefour Express store with delivery fees under €2,” Capoul said.
The company doesn’t plan to generate most of its revenue from delivery fees. Those are minimum fees so that you don’t order one item at a time. Instead, the company will get margins from products themselves, like any retailer.
Frst and XAnge are leading the seed round with the two co-founders of Chauffeur-Privé (later rebranded as Kapten) also participating.
I asked about the company’s plans when it comes to delivery staff. As Gurvan Kristanadjaja reported for Libération last year, there are some serious issues with contractors working for food delivery companies in France. For instance, a significant portion of Frichti’s delivery people were illegal immigrants. Some riders on Deliveroo or Uber Eats also rent their accounts to illegal immigrants.
Capoul told me that it is going to hire some employees to handle deliveries and give them electric bikes. But the company will also work with partners — both contracting companies and freelancers.
“We don’t want to have the same standards as Deliveroo or Uber Eats. Recruiting the right delivery people, making sure that they have work permits are important topics,” Capoul said. Each micro-fulfillment center will also have a restroom and a place to wait for the next order.
It’s going to be important to see whether Cajoo manages to keep high standards over the long run as the service gets more popular. At least, the service is starting with the right mindset.