Gopuff buys UK grocery supply start-up Dija

LONDON – American startup Gopuff agreed on Thursday to buy Dija, a UK competitor that was founded just eight months ago.

Gopuff said the move would help the company expand into Europe by building a bigger presence in the UK and entering France and Spain.

The company acquired Fancy, a similar start-up based in the UK, just three months ago.

Founded in December by former employees of UK grocery supplier Deliveroo, Dija is one of a new generation of startups that promise to get groceries to people’s doors in minutes.

These companies have grown rapidly over the past year, backed by billions of dollars in venture capital. Dija has raised $ 20 million in seed capital from Index Ventures, Blossom Capital and Creandum.

Other competitors are Getir, a Turkish company with a value of 7.5 billion US dollars, as well as the German start-ups Gorillas and Flink.

Grocery delivery startups thrived during the Covid-19 pandemic as people went to online platforms to order their essential groceries rather than in stores.

Dija and his competitors use so-called “dark stores”, small warehouses in which couriers pick up and deliver the items ordered by customers. Companies buy products wholesalers and sell them through an app, often at a premium to supermarket prices.

Industry experts have questioned the sustainability of the newcomers’ business models. The market is very crowded and requires tons of cash to gain scalability.

“The amount of money spent on this opportunity bears no relation to the size of the opportunity,” Luke Jensen, CEO of Ocado Solutions, a unit of UK food technology pioneer Ocado, told CNBC earlier this year.

“I suspect there will inevitably be a major consolidation among these players,” he added.

It looks like the industry is already beginning to consolidate. Getir recently acquired a competitor in southern Europe called BLOK. And Flink reportedly piqued the interest of Amazon and Gopuff.

The US company announced that the takeover of Dija by Gopuff should be completed within 30 days. The financial terms were not disclosed. It’s an unusually quick exit for a risk-funded start-up.

The deal is intended to give Gopuff a much greater reach in Europe, operate around 40 dark stores and employ 200 people.

“The combination of Dija’s team of industry veterans, extensive infrastructure and local expertise will complement Gopuff’s proprietary technology and unique customer experience and enhance our ability to scale rapidly in building a leading platform in Europe,” said Daniel Folkman, senior vice president of business .

It is not clear whether any Dija employees will be laid off as a result of the takeover. A Dija spokesperson was not immediately available for comment when contacted by CNBC.

Gopuff, backed by SoftBank, raised $ 1 billion last month in a round of funding that valued the Philadelphia-based company at $ 15 billion.

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