It’s been a long seven months for Henri Capoul, cofounder of France’s only home-grown speedy grocery delivery startup, Cajoo.
Since launching in Paris in February, he’s seen half a dozen competitors launch on his home turf and gone through a round of talks with potential acquirers — including US delivery giant Gopuff, Capoul confirms to Sifted.
“We’ve talked to a lot of players in the past months, including Gopuff,” says Capoul. (Gopuff recently acquired British competitor Dija, while German competitor Gorillas was in talks to sell to another US delivery giant, DoorDash).
“The discussion with Gopuff was to eventually sell the company, but that was not the way we chose.”
The discussion with Gopuff was to eventually sell the company, but that was not the way we chose.
Instead, Cajoo has raised a $40m Series A funding round from a troupe of investors including French supermarket giant Carrefour, and VC firms Frst, Xange and Headline.
“Now our ambition is to consolidate our position in France,” says Capoul. Cajoo currently has a “bit more” than 100k users, is present in 10 cities in France and operates 20 dark stores.
Carrefour: A unique advantage?
Landing a supermarket as a strategic investor gives Cajoo an edge, argues Capoul.
“Some competitors have much more money than us, but we have an advantage in Carrefour,” he says. (Turkish competitor Getir has raised €840m, while German competitors Flink and Gorillas have each raised more than €250m in total.) “We instantly get access to their buying power — access to products at great costs — and can increase our margins.”
“We’ll be buying part of our assortment from Carrefour, and still continue to source some products direct from big and small brands,” explains Capoul. Cajoo will also be able to tap into Carrefour’s logistics network for delivery of these goods to its hubs.
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“There is a real chance that in terms of cash management, we’ll burn much less than competitors.”
Cajoo has some exclusive brand partnerships: with beer brand LBF, cider company Sassy, snack brand Supernuts and cleaning products company Spring. It’s also developing its own Cajoo branded products: there’s already a Cajoo beer and Cajoo cashew nuts available on the app.
“This is the beginning; we want to push that,” says Capoul. “It’s important to have some sparkles, some differentiation between services.”
Own-brand products are also a good way to increase margins and “get faster to profitability”, adds Capoul.
Germany’s Flink also formed a strategic partnership with German retailer REWE earlier this year, although Capoul says “the Carrefour investment is much more powerful”.
“[Carrefour] are getting their hands dirty,” he adds. “We’re signing commercial partnerships with them as well.”
By investing in Cajoo, Carrefour — which already has partnerships with other delivery upstarts like Deliveroo — has moved at lightning speed compared to other grocery giants.
We knew all the big physical retailers wanted to be part of this battle.
“We knew all the big physical retailers wanted to be part of this battle. They were all looking at it, but it was moving very fast,” says Capoul. “Investment [in a startup] was the most logical and easiest way for Carrefour to be part of the game.”
Cajoo isn’t lining up an exit to Carrefour just yet though, insists Capoul. “I don’t think the exit possibility is on the table; our ambition is still the same. There are a lot of B2C companies built in Germany and the UK, while France is strong in B2B. We want to prove that France can build unicorns on the B2C side too.”
To build that unicorn, Cajoo will focus on cementing its position in France before planting flags across the continent.
Competition is arriving thick and fast — but Capoul hopes that being first and being French will help Cajoo stay in the top spot.
“There’s a fog of eight or 10 players,” he says. “That’s great; it validates the French market — and faster than we were expecting. A lot of money has been poured in, and customers are more evangelised.”
“The fact that we arrived first is, I think, an advantage as we could get some customers at low costs.”
“The fact that we’re French in France is also quite important for users.”
Capoul expects that, depending on neighbourhood and competition, each hub (or dark store) that Cajoo opens can be profitable between six months and one year from launch. Geographies, he says, should be profitable within two-to-three years.
The fact that we’re French in France is also quite important for users.
“We’ll start expanding in Europe at the beginning of next year,” says Capoul. “We’re looking at Belgium, Spain, Italy and Eastern Europe.”
“There aren’t many synergies between countries; for each country launch you need to rebuild the distribution network and marketing and so on,” he adds. “It’s important to be strong country by country.”