Online grocery delivery company JOKR is out to show that it can continue to be a leader in the industry. Despite the sector’s ups and downs over the past few years, the company, which does business in Brazil as DAKI, found its niche and is thriving in what seems to be a resilient Latin American market.
Today, JOKR announced it secured approximately $50 million in Series D financing at a post-money valuation of $800 million. This is down from the company’s $1.3 billion post-money valuation following a $50 million Series C announced in February.
Speaking to the decreased valuation, JOKR founder and CEO Ralf Wenzel told TechCrunch that in a time when other companies raised debt at an 80% discount, JOKR’s 40% valuation haircut “is appropriate and reflects market conditions.” It also didn’t come with any strings attached, additional board seats or particular preferences.
He went on to explain that the $800 million valuation was validated by a new investor and strategic partner. The Series D round was led by Convivialité Ventures, the investment arm of wine and spirits giant Pernod Ricard. Lombard Odier comes on as a new investor and joins existing investors, including G Squared, GGV, Balderton Capital, Monashees, Greycroft, Tiger Global Management and JOKR’s founders in the round.
The company wasn’t intentionally going after funding, however, Wenzel said there was strategic interest in JOKR coming from different angles, most notably retail incumbents and consumer packaged goods companies.
“That combination of validation makes us believe that we are now in a framework and bandwidth that most likely represents the strength of our financial performance, relative to an obviously adjusted overall market environment which has come down for the whole sector,” Wenzel said.
Growth after decline
The new investment not only puts the company on a path toward profitability, but also solidifies its place in Brazil’s underserved grocery market that is poised to reach $80 billion by 2026, Wenzel said.
It wasn’t that long ago that JOKR was having to make some tough decisions, including leaving the U.S. to focus on Latin America, but then also cutting some of its Latin American markets as it shifted to a Brazil-only strategy.
The company has since improved its financial performance and continues to grow month over month. Though Wenzel didn’t go into specifics, he did say the company is above 25% gross profit and no single grocery order is subsidized. In addition, JOKR also “continuously increased retention rates and frequency of ordering among its customer base.”
In addition, the success of its advertising program over the past year was attractive to potential investors. JOKR enables brands to advertise and promote their products via the DAKI platform. It saw “a big pickup” in those advertising activities and created a lot of interest among CPG brands. That business now accounts for 10% of JOKR’s overall revenue, according to Wenzel.
“Our advertising business allows for the level of detail, customer segmentation and analytics that are superior to many other retail and online media channels,” he said. “Unlike Europe and the U.S., you can work directly with brands and producers in Latin America. That also unlocks a different type of relationship, so we have increased our revenue from the advertising activities quite substantially.”
JOKR also now provides a full grocery offering in Brazil it calls “shopping missions.” The company started with instant deliveries. In the past few months, it began offering scheduled deliveries where customers choose a 30-minute time slot, which could be tomorrow or the next week.
The company has also upped the number of products it offers. Unlike other instant grocery delivery competitors that offer between 1,500 and 2,500 products, JOKR is now up to 10,000 products.
Meanwhile, the newly secured capital gives JOKR some runway to continue developing those grocery offerings. The company will also expand in its existing metropolitan areas.
In the short term, Wenzel wants the company to become profitable. Long term, the new capital “unlocks a whole range of different opportunities” that could include going back into some of the Latin American markets it had to previously exit, Wenzel said.
“We can now, with the additional cash, determine our destiny to a certain degree once we are profitable,” Wenzel said. “With more capital getting into the company, one could look into a more flexible approach with regards to expansion. Becoming a public company is another avenue that could be very interesting.”