Flink Secures $106 Million in Additional Funding Amid Sector Struggles

German grocery delivery startup Flink has received a commitment from investors to inject an additional €100 million ($175.8 million) into the company. The funding comes as the rapid delivery sector faces challenges due to increasing costs and sluggish demand.

Transaction Snapshot

  • Deal value: €100 million
  • Deal multiples: N/A
  • Deal type: Funding round
  • Investors: Existing backers, including Rewe Group, Bond, Northzone, and Cherry Ventures

According to people familiar with the matter, about one-third of the financing has already been paid out, with the possibility of two further tranches depending on the outcome of ongoing sale discussions with Turkish rival Getir and Dutch food delivery company Just Eat Takeaway.com.

The funding round was led by Flink's existing investors, including German grocer Rewe Group and venture capital firms Bond, Northzone, and Cherry Ventures. However, Abu Dhabi's Mubadala Investment Co. and US food-delivery player DoorDash did not participate in this round.

Flink, one of the few remaining rapid delivery startups in Europe, has raised US$1.4 billion to date and was valued at approximately US$2.85 billion in late 2021. The company offers a limited selection of groceries via an app, delivering from small local warehouses using couriers on bicycles.

The rapid delivery sector has seen a proliferation of apps promising groceries in 10 minutes during the pandemic. However, many startups have struggled with low margins, high customer acquisition costs, and a lack of differentiation from competitors. As interest rates have risen, some companies have either shut down or been acquired by better-funded rivals.

With this additional funding, Flink may be aiming to outlast the competition in the markets it operates in. Rewe Group has expressed openness to further financing Flink and merging it with a peer. Just Eat Takeaway's CEO, Jitse Groen, has also hinted at more dealmaking in the sector, stating that lower valuations in Europe compared to the US will likely lead to global consolidation.

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