American grocery delivery firm Gopuff signed a deal agreeing to purchase Dija, a British competitor. Gopuff is hoping that the acquisition would assist it in developing its presence exponentially in Europe by first establishing itself within the United Kingdom. The company plans to make a foray into France and Spain shortly.
Gopuff hopes to combine Dija’s extensive infrastructure, its team of industry veterans, and its local expertise to complement Gopuff’s proprietary technology to create a leading platform in Europe.
The start-up Dija was founded by the enterprising former employees of Deliveroo, another food delivery firm just eight months ago. Dija is a new start-up that promises to deliver groceries to people’s doors in minutes.
The Covid-19 pandemic and the subsequent lockdowns created a business idea of delivering groceries to consumers. The fear of contracting the coronavirus has made people turn to online platforms to order their groceries from the safety of their homes. Grocery apps have grown exponentially the same as food delivery apps over the past year.
Dija has raised $20 million in seed money from Index Ventures, Blossom Capital, and Crandum. Most of these companies have billions of dollars as venture capital pumped into them. Other rivals include a Turkish firm Getir, valued at $7.5 billion, and German start-ups Flink and Gorilla.
The Philadelphia-based firm Gopuff, backed by SoftBank, raised $1 billion in a financing spherical valuing it at around $15 billion.
Grocery delivery companies like Dija use small warehouses called ‘dark stores’. Couriers go to these warehouses and collect the products ordered by customers and complete the delivery quickly. Grocery delivery companies buy products in bulk and then sell them at a premium through their apps.
Gopuff’s acquisition of Dija is on a fast track, and the deal is expected to be completed within 30 days. The agreement will give Gopuff a mega reach into Europe, and it will operate about 40 dark stores with around 200 employees.
Industry experts are skeptical about the sustainability of this business model. Experts believe that there will inevitably be a lot of consolidation among these start-ups in the future.