Dutch Online Grocery Store Picnic Secures €355 Million for Expansion

Dutch online grocery retailer Picnic has successfully raised €355 million in funding from Edeka Zentrale and Bill and Melinda Gates Foundation, to bolster its expansion efforts in France and Germany. This significant investment marks another milestone in the company's growth since its inception in the Netherlands in 2015. Renowned for its efficient delivery model using small electric vans, Picnic has established a strong presence in the European online grocery market.

Transaction Snapshot

  • Deal Value: €355 million
  • Deal Type: Investor Capital
  • Investors: Edeka Zentrale, The Bill and Melinda Gates Foundation Trust

Picnic, which commenced operations by delivering groceries from local distribution warehouses, has attracted considerable investor interest. Key investors in this funding round include Germany's largest supermarket group, Edeka, and The Bill and Melinda Gates Foundation Trust. Notably, the latter is managed by Cascade Investment, distinct from the philanthropic Gates Foundation. This funding follows a substantial €600 million Series D round two years ago, bringing Picnic's total funding to over €1.3 billion.

With operations in over 200 cities across the Netherlands, Germany, and France, Picnic is on track to hit €1 billion in annual sales by the end of 2024. The company's recent announcement arrives amid challenges in the last-mile food delivery sector, including rising food prices, rapid expansion, warehouse closures, and labour issues. Despite narrow profit margins and a shift in the industry from ultra-fast to more scheduled deliveries, Picnic's business model, featuring free delivery and competitively priced own-brand products, continues to thrive.

Unique to Picnic's approach is its use of large distribution warehouses, similar to those of Ocado. These facilities leverage automation and robotics for physical tasks, while AI-led demand forecasting helps to minimise waste and ensure product availability.

The recent investment underscores Picnic's successful international expansion, particularly noted in its 40% growth in 2023 and a turnover of €1.25 billion for the year. Hamburg, a new market for Picnic, generated €40 million in turnover within six months of launch, highlighting its rapid growth trajectory. Picnic co-founder Joris Beckers, in a statement, emphasised the company's strategic approach to expansion in Germany and France, mirroring its initial growth in the Netherlands.

The fresh funding is earmarked for further international expansion, reinforcing Picnic's commitment to broadening its market reach and enhancing its unique position in the online grocery sector.

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