Berlin-based quick-commerce startup, Flink, is charting its path forward with a new $150 million funding round, positioning itself as a dominant player in the European grocery delivery market. This comes amidst a turbulent period for the quick-commerce sector, which has seen many of its peers struggle or face significant valuation cuts. Despite these challenges, Flink has remained resilient, announcing plans to double down on its core markets in Germany and the Netherlands, in partnership with Just Eat Takeaway.com.
Breaking Down the $150 Million Round: Equity and Debt Components
Flink's latest funding round comprises $115 million in equity and $35 million in debt, secured from a mix of new and existing investors. Notable backers include investment firms like BOND, Mubadala, and Northzone, alongside German supermarket giant REWE. Two additional investors, whose identities remain undisclosed, also participated in this round.
This capital injection arrives at a critical time for the company, as it looks to scale its operations in key markets and enhance its operational efficiencies. “This investment will enable us to further expand our footprint, improve operational efficiency, and continue delivering the fast, reliable service that our customers rely on,” said Oliver Merkel, Flink’s founder and managing director.
Strategic Partnerships: A Key Driver for Growth
One of the most significant developments accompanying this funding round is Flink's partnership with Just Eat Takeaway.com. While there were previous talks of a merger between the two companies, the collaboration has instead materialized as a “preferred partnership.” Flink now delivers grocery items for REWE to Lieferando customers, which is part of the Just Eat Takeaway.com group. This partnership has been pivotal in maintaining and expanding Flink’s footprint in the region.
Although it has not been confirmed whether Just Eat Takeaway.com is one of the unnamed investors in this round, the partnership signals a strong collaboration between the two companies as they work together to dominate the quick-commerce market in Europe.
The State of Quick-Commerce: A Shifting Landscape
Flink’s ability to secure this latest funding round is particularly notable given the struggles faced by its competitors. In 2021, venture capitalists poured $5.5 billion into European quick-commerce startups, but the tides shifted rapidly as market conditions worsened and consumer sentiment changed. This shift forced many startups to re-evaluate their business models, leading to steep valuation cuts, acquisitions, or even closures.
Turkey-based Getir, one of Europe’s largest players, experienced a significant drop in valuation from $11.8 billion to $2.5 billion in 2023 after acquiring German competitor Gorillas. Earlier in 2024, Getir exited the European market entirely and entered a restructuring phase under the direction of investor Mubadala.
Flink itself has not been immune to these challenges. The company exited Austria in December 2022 and filed for bankruptcy in the French market in June 2023. However, with its renewed focus on Germany and the Netherlands, Flink is betting on its ability to scale profitably and compete in this rapidly evolving sector.
Flink’s Profitability Journey: Aiming for 2025
While profitability remains an elusive goal for many quick-commerce startups, Flink has made strides toward achieving it. According to the company, it has already achieved profitability on a country-by-country basis and is targeting full profitability by the second quarter of 2025.
Achieving profitability in the quick-commerce industry is no small feat. The sector is notorious for its tough unit economics, particularly the high costs associated with delivering groceries to customers within minutes. Many industry experts argue that the cost of acquiring customers and maintaining ultra-fast delivery times makes profitability a difficult target for these companies. Despite these hurdles, Flink is confident that its growth strategy and operational efficiencies will enable it to reach this goal.
Impressive Revenue Growth Despite Market Exits
Flink is on track to achieve gross revenues of $600 million in 2024, reflecting a 20% year-on-year growth rate, excluding the costs associated with exiting the French market. The company's average basket size is currently $40, indicating healthy spending from its customer base. These figures are particularly impressive given the company's recent exits from Austria and France, further underscoring Flink's ability to maintain strong performance in its core markets.
Flink is currently active in 80 cities across Germany and the Netherlands and plans to open 30 additional locations in these countries over the next 12 months. This expansion is aimed at solidifying its market position in what has become a fiercely competitive industry.
Flink's Valuation and Recapitalization
While Flink did not disclose its current valuation, sources close to the company have indicated that it is now just under $1 billion. This represents a significant decline from its peak valuation of nearly $5 billion following an investment from DoorDash in December 2021. Since then, Flink has undergone a process of recapitalization, raising more than $1.5 billion according to PitchBook data. Earlier this year, Flink was rumored to have raised $106 million while exploring a potential sale to Getir or Just Eat Takeaway, but the company now appears committed to moving forward independently.
Conclusion: Flink’s Road Ahead
Flink’s latest funding round is a critical step forward as the company aims to secure its place in the rapidly evolving quick-commerce landscape. With strong backing from investors like BOND, Mubadala, Northzone, and REWE, along with a strategic partnership with Just Eat Takeaway.com, the company is well-positioned to double down on its core markets in Germany and the Netherlands. Despite the challenges faced by the industry, Flink remains optimistic about its ability to achieve profitability by 2025 and continue delivering fast, reliable service to its customers.
As Flink scales its operations and navigates the complexities of the quick-commerce sector, it will be worth watching how it adapts to changing market dynamics and whether it can maintain its momentum in the face of fierce competition and ongoing consolidation in the industry.
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