Everyone buys groceries - it’s the largest category of retail. Going to the supermarket is something many of us do every week, which means we all recognize the pain of travelling to a physical location, navigating through a crowded store, and carrying bags filled with heavy products back to your home.
The experience is as old as there’s been things to buy, and it’s a time killer many of us don’t need in our lives. Hence, the convenience and benefits of getting groceries delivered is obvious. But providing an online grocery shopping experience is generally a very capital intense business, with thin margins and high customer demands. Some models have proven better than others, and Creandum has been fortunate enough to experience the amazing journey of Linas Matkasse growing profitably from day one, with its original recipe-based grocery service which has been copied by Hello Fresh, Blue Apron and others across the globe.
But the growth of smartphones across the world opens up the market in different ways for new innovations. So allow us to introduce you to Cornershop. Cornershop provides same day grocery delivery services in Mexico and Chile, using regular grocery stores as their warehouses. Customers use an intuitive and beautiful mobile interface to order groceries and Cornershop’s own distributed workforce, armed with their shopper smartphone app, accept orders and pick groceries in stores and then delivers them to the customers within 90 minutes. The end result is a convenient on-demand service built on top of a highly capital efficient and agile platform, fulfilling one of the most fundamental shopping needs that exists. To start with, they’re targeting a massive $1500B LatAm grocery market.
Today we are proud to announce that Creandum is backing Cornershop in a $6.7M Series A. The investment is done together with US investors Accel and Jackson Square Ventures, as well as local Mexican VC AllVP. Creandum's advisory team have closely followed the company since its launch in early summer of 2015, and we have been utterly amazed by the team’s operational diligence, fast growth and impressive customer retention. The three co-founders Oskar, Dani and Chaq already have an impressive track record having successfully sold Needish to Groupon and following that being responsible for rolling out the daily deal business across the region. We couldn’t be more excited to participate in this next adventure the team are embarking upon. Cornershop’s model requires capital to reach scale but is very different compared fully vertically integrated online grocery models like Ocado and Mathem, since it doesn’t have as intense fixed cost of capital with no inventory and agile workforce. While Instacart, which shares similarities to Cornershop, in the US has taken some time to reach local profitability in the US, we think the Latin America market is even better suited for this model because a combination of regional purchase power, lack of alternatives and cost of labor.
So why is Creandum investing in Latin America? Well first of all, the co-founder and CEO Oskar happens to be Swedish, and he’s a true a testament that the Nordic entrepreneurial DNA today exists far beyond the fund's original home market. And I’ve known and followed Oskar for a long time. But Creandum’s focus is to primarily invest across all of Europe. Outside of the Nordics, the fund is proud backer of some of the best European companies like Peak in the UK and Distribusion in Germany, to just name a few. However, in addition to its European focus Creandum has an opportunistic global approach to investments. The world is flat, with talent and capital moving across borders creating innovation all over the world. And as advisors to the fund, we strive to look for such innovation and be just as adaptable. Cornershop is built by a stellar team, going after a massive market, in the grocery business which we know well from before, and with impressive growth metrics. Innovation is global. And so are we.