Disrupting a trillion dollar market, thoughtfully and responsibly
Why we invested in JOKR — the next generation instant delivery platform
Over the last two decades, we at Balderton have been privileged to invest in exceptional teams in e-commerce. We’ve partnered with unicorns like Yoox, Depop and Vestiaire Collective and THG, who went public last year at a $7bn valuation. What unites them all is a singular dedication to create extraordinary customer experiences that redefine their category. Without exception, they’ve leveraged technology to scale the world-class operations required to make these businesses the huge successes they have become.
Today, we’re thrilled to announce the next chapter in this story: we’re co-leading the $170m Series A round of JOKR, a leading global grocery and retail platform already present in Latin America, the US and Europe. JOKR has huge ambitions and we’re delighted to be investing alongside a number of other good friends in the technology ecosystem including Tiger Global, Golden Gate Ventures, Activant, HV Capital, Greycroft, Kaszek, Monashees and FJ Labs.
JOKR’s HQ is in New York, where it rolled out operations in early June and is already operating 10 hubs. This round will be used to continue growing and to roll out across new cities in the US, Latin America and Europe.
Quick commerce, and the unbundling of the grocery cart
Quick Commerce (or Q-commerce) is a sector we’ve been looking at closely for two years — ever since someone in our portfolio described it as “the best service they ever used”. Even before lockdowns increased our preference for online shopping, consumers were shunning the traditional ‘big shop’. In our increasingly busy lives many of us want to avoid the travel, the queuing and the meal planning. Quick Commerce provides a radically simpler experience: browse a curated catalogue on an app, then order, and get what you need on your doorstep 10–15 minutes later.
Our team and portfolio have seen the benefits first hand. A new parent cuts out the weekly shop to spend more time with their family. One of our associates buys fresh ingredients for an impromptu dinner party. Choose, pay, relax. It’s like magic.
The broader thesis that we have been chipping away over these years is the unbundling of the grocery cart:
- Groceries and household goods are a massive $8tn market, of which only 3% today is online. The customer experience is often sub-par. Supermarkets stock tens of thousands of items. Consumers are pushed into time-consuming weekly shops. In the end, the whole experience only really works for the supply chains of retailers;
- Digital alternatives could be an order of magnitude better. But shopping from traditional online retailers is just as tedious. No one really likes to choose between three types of canned tomatoes, only to get them delivered between 4 and 6pm six working days from now. Even if delivery is available in an hour or two, busy families have to plan ahead so the pain point is never quite removed.
- The ‘big shop’ (and its associated basket value) is rapidly being unbundled by more convenient digital alternatives. Especially in cities, the density of customers and untapped demand creates an opportunity for challengers that offer an easy choice of trusted local and national brands at competitive prices. Quick Commerce has already captured some of that opportunity. We’re convinced much, much more lies ahead as the standard modus (sh)operandi shifts to monthly purchases/subscriptions and several higher value instant shops;
- But as big as grocery is, this is a market that runs on tight margins and with mind-blowing logistics. For Quick Commerce to succeed in the long run, not only does it have to change consumers’ relationship with retail, it has to do so in an economically, environmentally and socially sustainable way.
For Quick Commerce to succeed in the long run, not only does it have to change consumers’ relationship with retail, it has to do so in an economically, environmentally and socially sustainable way.
Success driven by excellent execution and true customer love
Solving the complex equation of success in this sector requires phenomenal operational prowess and commercial savvy. To build a successful business you need to:
- Offer a highly curated, but limited, range that caters specifically to a local area;
- Deliver the right products at the right time every time;
- Convert customers into loyal advocates that keep returning.
We thoroughly investigated whether this model could be profitable. We believe that it can be, and even quite soon. On the revenue side, the key is to maximise the value of each order, ensure superior intake margins and increase customer spend over time. On the cost side, teams have to optimally use riders, quickly turn over inventory and pick the right locations to scale.
For us, a winning team would have the audacity to guide key decisions using the most granular data: which markets to go for, where to place hubs exactly, and what range to stock to consistently wow customers. We wanted to back a company that quickly created a virtuous and scalable cycle of happy customers, increased purchase frequency, and growing basket sizes.
We wanted to back a company that quickly created a virtuous and scalable cycle of happy customers, increased purchase frequency, and growing basket sizes.
Investing in JOKR: a bold and seasoned team rooted in sustainable practices
When we went on the hunt for the perfect team, we defined a rigorous set of criteria:
There are a few strong teams attacking this space, particularly in Europe. That said, within minutes of meeting the JOKR founders we had a strong feeling our hunt had come to an end.
For Ralf, Ben, Sven, Konstantin, Aspa and Mili, this is not not their first rodeo. They have built several global category-defining businesses together in the last two decades — Jamba, Moneybookers and foodpanda, to name a few. They’re a remarkably tight-knit team with a real singularity of mind. They committed pre-launch to build a distributed organisation between New York, Berlin, and Mexico City, and did so masterfully by hiring top talent and developing an incredibly detailed scaling blueprint. The footprint they have achieved here in mere months with a remote-first team is exceptional and testament to their approach.
What’s more, they have built a scalable tech and data infrastructure early on to power their growth and learning. The way in which JOKR uses data to identify markets, range, promotion strategies and customer acquisition at the most granular level is almost sci-fi. The combined force of their tech and deep bench of talent has powered them to expand at warp speed across three continents (in the few days between our first two meetings the business doubled in size!).
In a few numbers: JOKR has opened roughly one hub per day in an ever-expanding list of cities, including New York City (US), São Paolo (Brazil), Mexico City (Mexico), Bogota (Colombia), Lima (Peru), Warsaw (Poland) and Vienna (Austria). Today they operate 100 hubs, and double their order volume roughly every 2 weeks.
Finally, the JOKR team really embodies the ethos of bold decision-making, contrarian thinking and commitment to sustainable business practices needed to build an international category leader. The team made a deliberate choice to hone their playbook in Brazil and Mexico, instead of the usual European metros, before expanding to New York, Vienna and others. From Day 1 they had a detailed culture manifesto that has driven their decision-making in hiring, promoting and creating responsibility. And they also employ all of their drivers and pay them a fair wage, to ensure that the whole local community benefits from the presence of a JOKR hub. It is rare to see any company move this fast, and yet so thoughtfully.
In very characteristic style, we first met Ben and Sven in person right after they received the keys to their Berlin office. They promptly introduced us to all employees and launched into an animated discussion on scaling, the philosophy of hiring, data, and why lasting businesses are good for people, planet and profit. We could not be more excited to embark on this journey with them.
Ralf, Ben, Sven, Konstantin, Aspa, Mili and team — welcome to the family!
