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Gorillas, the Berlin-HQ’d startup that promises to let you order groceries and other “every day” items for delivery in as little as ten minutes, has raised $290 million in Series B funding, at a valuation that surpasses $1 billion.
The round is led by Coatue Management, DST Global, and Tencent, with participation from Green Oaks, and Dragoneer. Previous backer Atlantic Food Labs also followed on.
Noteworthy, Gorillas CEO and co-founder Kağan Sümer tells TechCrunch the round is “100% equity” (i.e. without a debt component). Asked if it includes any secondary funding — seeing existing shareholders liquidate a portion of their shares — Gorillas declined to comment.
Having become one of the fastest European startups to have achieved so-called “unicorn” status — a valuation of $1 billion or more — Gorillas says it will reward its rider crew and warehouse staff with $1 million in bonuses. However, the company isn’t disclosing how this one-off bonus breaks down per worker, and it isn’t clear if the bonus is cash or stock or a mixture of both.
“In contrast to established gig economy models, we employ more than a thousand riders directly,” says Sümer. “Therefore, we invest in a strong career development program, rider security and a healthy working environment. Beyond that, all riders will receive a once-off payment”.
Founded last May by Kağan Sümer and Jörg Kattner in Berlin, Gorillas has already expanded to more than 12 cities, including Amsterdam, London and Munich. The company lets you order groceries and other household items on-demand with average delivery time of ten minutes.
To do this, it operates a vertical or “dark store” model, seeing it set up its own micro fulfillment centers, which currently total 40, spread across Germany, U.K., and the Netherlands. Customers are charged just over $2 per delivery and can order from “more than 2,000 essential items at retail prices”.
“We believe that the weekly grocery run is outdated because people’s lives are increasingly spontaneous and shopping habits change accordingly,” says Sümer, noting that while access to supermarkets has increased, the space we have to store goods has decreased as people in cities are living in smaller spaces.
“Additionally, this pandemic has accelerated the need for grocery deliveries. If we can order clothes and trinkets and have them delivered to our door, the same should be said for our essential needs. Gorillas helps customers get what they need when they need it, whether this is their weekly grocery list or the tomatoes they forgot for tonight’s pasta recipe”.
Sümer says that the service initially attracted typical early adopters because it was a radically new experience and the app was only available in English. He claims that Gorillas has since gained a “very broad” base of users that are “extremely loyal”. “With geographical expansion and the rapid increase of word-of-mouth, we now cater to pretty much anyone you’d meet in a supermarket,” he says.
Asked to share what a typical basket looks like, and therefore what kind of existing grocery habits Gorillas is displacing, Sümer says that users increase their basket size over time as they gain trust in the service and its products. “Simultaneously, customers are integrating an increasing share of their typical supermarket purchases within their Gorillas orders. This includes fresh goods like fruit and vegetables, as well as products of local suppliers”.
Meanwhile, dark store competition in cities like London — where Gorillas recently expanded and counts as a key market — continues to ramp up. This is seeing operators issue vouchers and offer sizeable discounts in a bid to acquire customers fast, while VCs are pumping huge amounts of early-stage cash into a space where unit economics aren’t yet definitively proven.
Earlier this month, Berlin-based Flink announced that it had raised $52 million in seed financing in a mixture of equity and debt. The company didn’t break out the equity-debt split, though one source told me the equity component was roughly half and half.
Others in the space include London’s Jiffy, Dija, and Weezy, and France’s Cajoo. There’s also London-based Zapp, which remains in stealth, and heavily backed Getir, which started in Turkey but recently also came to London.
Meanwhile, U.S.-founded goPuff — which this week raised another $1.15 billion in funding at a whopping $8.9 billion valuation (compared to $3.9 billion in October) — is also looking to expand into Europe and has held talks to acquire or invest in the U.K.’s Fancy.
In January, localized payments provider PPRO became the latest fintech-as-a-service startup to hit a billion-dollar valuation when it closed $180 million in funding. As a mark of how payments and e-commerce continue to be major areas of focus in the global economy, today PPRO is extending that round by another $90 million and adding in two new investors to its cap table.
The financing is coming by way of strategic backing from JPMorgan Chase, and Eldridge (which is the second time this week the PE firm has been in the news for making a major investment in an enterprise tech company: earlier this week Eldridge was one of the leads on a $475 million round for real-time intelligence provider Dataminr).
The enlarged $270 million round — the January tranche was from Eurazeo Growth, Sprints Capital and Wellington Management — includes both primary and secondary capital, and this latest tranche is part of the secondary element, PPRO CEO Simon Black confirmed to me. Prior to this, London-based PPRO (pronounced ‘P-pro’) raised $50 million in August 2020 from Sprints, Citi and HPE Growth; and in 2018 it raised $50 million led by strategic investor PayPal.
PPRO’s core product is a set of APIs that e-commerce companies can integrate into their check-outs to accept payments in whatever local methods and currencies consumers prefer, removing the need for PPRO customers to build those complex and messy integrations themselves. Its business has boomed in the last year as one of the bigger providers of that localized payment technology, with transaction volumes up 60% in 2020 to $11 billion in processed payments.
JPMorgan Chase, meanwhile, is one of the world’s financial giants, providing banking and credit cards among its many other services. The idea is that it wants to build more payment services around its existing relationships and to expand its payment business globally, working more closely with PPRO as part of that. There are two main areas where PPRO could figure: to help its credit card business gain more ubiquity as a payment method in more parts of the globe; and to be a service provider for its business banking customers to help them expand in more markets with more flexible, localized payments.
“We are extending into payments and we are looking to double down on addressing the needs of our clients and their clients, which can be consumers, suppliers or marketplace sellers,” said Sanjay Saraf, MD and Global Head of the Integrated Payments Group at JPMorgan Chase, in an interview. “That last mile becomes important from a customer service perspective.”
In particular, the US company is hoping to double down on its business and footprint in Latin America and Asia Pacific, two emerging markets still seeing a lot of growth in e-commerce, in particular compared to more developed, penetrated and mature markets like the U.S.
This latest round of financing underscores two trends of the moment in fintech.
First, it points to how active the e-commerce market has become — a trend fueled not in small part by the Covid-19 pandemic, and the resulting shift people have made to carrying out everyday tasks online. Second, it’s a sign of how global financial services companies are looking for ways to remain relevant in every market, tapping into more innovations from fintech startups to get there.
The problem, as it exists, is that payments remains a very fragmented business.
The standard methods that a person might use to pay for goods or services online in one country — for example a credit card in the U.S. — might differ drastically from the preferred methods when selling in another — for example, in Belguim one popular format is Bancontact (where you visit a new screen to authorize a transfer from directly from your bank checking account).
As with other payments and fintech-as-a-service startups, the attraction of using PPRO is that it has built a lot of those integrations at the backend and packaged them up as a service, taking away a lot of the complexity, in its case of identifying and integrating each of those payment methods manually, and making it something that can be done seamlessly and quickly.
JPMorgan is now one of several other partners. Those relationships work in both directions, providing partners a way to expand their consumer-facing products, and to help them work with more businesses in more markets. (Similar, I suspect to how JPMorgan will work with it, too.)
Others in PPRO’s network of 100 large global customers include PayPal, Citi, Mastercard Payment Gateway Services, Mollie and Worldpay, which use PPRO’s APIs for a variety of functions, including localised gateway, processing and merchant acquirer services.
It is also not the only one that has identified the opportunity to simplify this part of the payment process and of other complex financial transactions that rely on localized approaches. Others in the same area include Rapyd, Mambu, Thought Machine, Temenos, Edera, Adyen, Stripe and newer players like Unit, with many of these raising very large amounts of money in recent times to double down on what is currently a rapidly expanding market.
The past year has been “an acceleration of a trend, where behaviors are being reinforced,” said Black in an interview. “At the consumer level, we are buying so many more products and services online, and we value convenience more than ever, which translates to a real strengthening of more demand for local payments.”
And while emerging technologies like cryptocurrency continue to see a lot of buzz, this is not at all where mass-market activity is for now. “The big trend is mobile wallets, not bitcoin,” Black said.
The latest in a string of space tech SPACs announced this year is Redwire, an entity created by a PE firm in 2020, which has acquired a number of smaller companies including Adcole Space, Roccor, Made in Space, LoadPath, Oakman Aerospace, Deployable Space Systems and more — all within the last year or so. Redwire announced that it will go public through a merger with special purpose acquisition company Genesis Park Acquisition Crop., and the combined company will list on the NYSE.
The deal puts Redwire’s pro forma enterprise value at %615 million, and is expected to provide an additional $170 million to Redwire’s coffers post-merger, including a PIPE valued at over $100 million. Unsurprisingly, one of the uses of the proceeds that Redwire intends to pursue is continued M&A activity to build out its list of service offering in the space domain.
Redwire’s mandate isn’t specifically to go after new space companies, and instead its targets share in common expertise in a particular, rather narrow slice of the severally space market. It’s capabilities include on-orbit manufacturing and servicing; satellite design, manufacture and assembly; payload integration; sensor design and development, and more. The idea appears to be to build a full-stack infrastructure company that can offer tip-to-tail space technology services, exclusive really only of launch and ground station components (for now).
It’s a smart approach for a bourgeoning new space economy where increasingly, technology companies who want to operate in space would rather focus on their unique value proposition, and outsource the complex, but mostly settled business of actually getting to, and operating in, space. Other companies are addressing the market in similar ways, with launchers bringing more of that part of the process in-house so their payload customers basically only have to show up with the sensor or communication device they want to send to space, and the launcher providing everything else — including even the satellite, in the relatively near future.
Redwire has proven revenue-generating power, with projected 2021 revenue of $163 million, and many of the companies now operating under its umbrella are fairly mature and have been operating cash flow positive for many years. Accordingly, a SPAC as a path to public markets likely does make sense in this particular instance, but the increasing frequency and volume of space companies choosing this route, is, on the whole, a trend to watch with healthy skepticism.
Everybody says they want to build user-centric companies and products, but how exactly is that achieved? Talking and listening to users, of course — a task that is both unnecessarily time-consuming and cumbersome to organise, according to Axel Thomson, a former product manager at U.K. recipe-box subscription unicorn Gousto.
His burgeoning startup, dubbed Ribbon, wants to make it easy for product teams to recruit and interview users, and to “continuously test and validate their hypotheses”. This, it’s hoped, will then lead to better products for users. The idea was born out of a need Thomson says he experienced himself while leading a user experience-focused product team at Gousto.
“I initially joined Gousto in the growth team, running product and marketing experiments focused on improving the user experience and increasing retention before moving over to the product team to work on improving the user experience more holistically,” he tells me.
“In both of these teams we had to constantly make decisions on what features and experiments we wanted to take bets on, quickly realising that as much as we thought we knew what the users wanted, the best way to find out was by having real conversations with users, and letting them test out different concepts. This was a big eye-opener to how difficult it could be to consistently make good and informed decisions on which products and features were worth testing and which ones were doomed to fail”.
Thomson says it’s become a trope within management circles that product teams should be user-centric and that products should be designed to help users solve “real problems”. But in reality, it’s often hard to know what users really think or actually want, while continuously doing user research and conducting interviews is very time-consuming.
“Teams will often spend days setting up interviews, resulting in a slow feedback loop that slows down product development and experimentation,” he says. “Alternatively, product teams seek solace in quantitative data from analytics platforms such as Amplitude and Mixpanel, which only give insight into how users have used their products once they’ve been shipped”.
Enter Ribbon, which its founder says lets companies start user interviews in roughly “the same time it takes to order a ride through Uber”. Product teams simply install the Ribbon widget on their website and can then recruit and conduct video interviews with users any point in the user journey.
“We want to help product teams rapidly and continuously do user interviews, and ultimately any type of qualitative user research, without having to make compromises on how quickly they can ship, how reliable results they can get and how frequently they can do research,” explains Thomson.
Ribbon is designed to appeal to product managers, designers and user researchers, all of whom benefit from validating their ideas by having conversations with users. However, Thomson argues that the benefits of user research isn’t limited to these roles only, and that while companies often have dedicated teams or people that “own” user interviews, there is an increasing interest in “socialising research findings and participation in user research across companies”.
“Our goal as a user research platform is to make it easy for our users to become evangelists of their research within their own teams and organisations, by making it really easy to do great research and share it with your team,” he adds.
It’s still early days, of course — Ribbon launched its MVP to the Product Hunt community at the end of October last year. Until now, the London-based startup has been bootstrapped, too, but today is disclosing that it has raised £200,000 in pre-seed funding from MMC Ventures, RLC Ventures and a group of London-based angels.
