3 Months After Launch, Grocery Platform JOKR Raises $170M

Just three months after its global launch, last-mile grocery and retail delivery platform JOKR has raised $170 million in a Series A investment round led by GGV Capital, Balderton Capital and Tiger Global Management.

The round was joined by Activant Capital, Greycroft, Fabrice Grinda's FJ Labs, as well as Latin America's tech-specialized VC firms Kaszek and Monashees. HV Capital, which was one of the company's seed round investors, also contributed to the Series A.

"The investment we announced [Tuesday] will empower us to continue our expansion at an unprecedented rate as we continue to build JOKR into the premier platform for a new generation of online shopping, with instant delivery, a focus on local product offerings and more sustainable delivery and supply chains. We are proud to be able to partner with such a distinguished group of international tech investors to help us seize the enormous opportunity in front of us," Ralf Wenzel, founder and CEO, said in a statement.

JOKR officially kicked off its 15-minute grocery delivery service in New York City on June 3. Zach Dennett, who worked with Walmart WMT on both its dry grocery goods and e-commerce business, is leading JOKR's U.S. efforts. In an interview in June, he explained why JOKR's business model would be successful.

Dennett told Modern Shipper the key to JOKR's success is its small warehouse facilities, select quantities of items and a team of employee delivery riders that will utilize electric bikes. JOKR brings goods from larger warehouses to local neighborhood microfulfillment centers, usually in the 2,500- to 3,000-square-feet size. This allows the company to hold down real estate costs and allows for a quicker turn of product. Because it is using a single larger facility, though, JOKR is able to leverage scale to purchase full truckloads of product from national brands. Each local fulfilment center will be replenished multiple times a day as needed.

All the items are chosen based on hyper-localized and neighborhood-specific data that allows JOKR to meet neighborhood demands. In addition, limiting brands increases volumes for those brands, leading to potentially lower prices.

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The new funding will accelerate JOKR's expansion plans. Operationally headquartered in New York City, the company is already operating over 100 hubs in nine cities, including São Paolo; Mexico City; Bogota, Colombia; Lima, Peru; Warsaw, Poland; and Vienna.

Dennett told Modern Shipper the company's data is helping it make more informed decisions.

"JOKR is first and foremost driven by data — one great example of this is how we are able to decide which items to stock in our hub locations based on our consumer data of what our consumers enjoy buying," he said. "As data drives how JOKR operates, naturally, JOKR's expansion into new cities across the U.S. will be informed by data. We study our proprietary global location selection tool before any expansion. We are also always looking at customer needs and competitive dynamics."

He noted that Boston would be the next U.S. city for the company. Dennett added the large Series A round is an indication that JOKR's business plan is on target.

"The $170 million Series A shows confidence from investors in our business model and really shows our company's strong stake in the ground in this industry," he said. "In the three months since our New York City launch, we've seen extremely strong customer growth and customer repeat rates. The customers are clearly loving the JOKR proposition. We've built an impressive team with widely diverse backgrounds and problem-solving approaches. And we've confirmed that the business model works. Our key initial investors made further investments and we're thrilled with the new investors joining us this round."

According to the company, order volume is doubling roughly every two weeks. More than 50% of all items ordered through its platform are sourced from local businesses. The JOKR app is available on both the App Store and Google Play.

"We are incredibly excited to be backing a team that has such an unprecedented track record of starting and running highly operational businesses like JOKR," Suranga Chandratillake, general partner at Balderton Capital, said in a statement. "Balderton has 20 years of experience backing unicorns in Europe and JOKR is one of the fastest-growing companies we have ever seen. It was crucial for us to invest in a company with a strong focus on sustainable practices, and we are really impressed by JOKR's unique model of partnering with local businesses wherever it operates."

Most JOKR delivery riders are company employees, complete with company uniforms (including clothing designed for various weather conditions) and company-provided electric bikes. The company contracts with third-party delivery providers to handle surge capacity needs.

"We are really happy with the launch in New York City so far. The locations that our data tools had predicted would work well have indeed been working well [and] our customer base is growing rapidly; the customers are repeatedly using JOKR as well as referring JOKR to friends," Dennett said. "We are getting good feedback on our initial assortment. We've also built the operation to continue our high on-time delivery rates as the business continues to grow."

Click for more Modern Shipper articles by Brian Straight.

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