The fast food delivery business is growing so rapidly that the once skeptical retail giant Rewe is now also getting involved. Meanwhile, Flink can collect a further 240 million euros in risk capital.

A courier from Flink drives through the streets of Berlin.

Dhe Berlin food delivery service Flink gets fresh capital and the support of a large grocer in the fight against competitors such as Gorillas. The Rewe Group becomes a sales partner for the start-up, which, like many currently rapidly expanding young companies, advertises that it can deliver orders to its customers within 10 minutes.

“During the Corona crisis, food retailers in Germany saw their delivery and pick-up service doubled,” said Rewe boss Lionel Souque in a statement from the company on Friday. The Cologne-based grocer is planning high investments in its own pick-up and delivery business in the years to come. “At the same time, we recognize that the delivery business with food in Germany is currently very differentiated,” said Souque. With a minority stake and the merchandise cooperation, Rewe could both contribute to the success of Flink and “benefit from the development of the market segment”.

For the start-up, access to goods is likely to be more important than financial support: In the competitive market, risk capital is hardly a problem at the moment. Flink announced on Friday that it would receive 240 million euros from investors such as Prosus, Bond and Mubadala Capital. This makes the young company just as unicorn as its better-known competitor Gorillas, i.e. a start-up with a valuation of more than 1 billion euros.

Financing is not a problem

The Turkish express delivery service Getir announced on Friday the completion of a financing round of 550 million dollars. Just like the food ordering platform Delivery Hero, the company also wants to expand to Berlin. The couriers usually deliver the goods on e-bikes. Despite the concentration of competitors in the market, everyone sees great growth opportunities – so far only around 3 percent of the German food market has been covered by e-commerce.

The Oetker Group recently took over the Münster-based start-up bottle post in order to merge it with its own delivery service Durstexpress. The largest German grocer, Edeka, recently said goodbye to its Bringmeister delivery service and sold it to financial investors. To this end, Edeka relies more on the Dutch company Picnic, which uses the milkman principle to deliver groceries at fixed time windows in street drawers.

Rewe has been critical of the business so far

However, Edeka is still staying out of the fast delivery competition. Rewe has also been rather critical of the business so far: “I still believe that start-ups that only sell groceries can generate good sales, but will never make money. They are then sold by one investor to the next, “said Rewe boss Souque in an interview with the FAZ last year. Nevertheless, he admitted that the extra service for customers also makes sense for Rewe.

With the pick-up and delivery service, the Cologne-based company is still the largest provider of online grocery deliveries in this country, but competition is getting tougher. The attitudes of consumers – and grocers – have changed as a result of the corona pandemic: although supermarkets and discounters are always open even in lockdown, some consumers have preferred to have their groceries delivered directly to their door.

“Respondents mainly discovered food as a new product category for themselves,” according to a recent study by the consulting firm KPMG. Almost one in three Germans already buys food and drinks at least occasionally on the Internet and has them delivered to their home. Another third could imagine buying from online supermarkets. The results are based on a representative survey with more than 3000 respondents.

According to figures from the Association of Online Mailers BEVH, online grocery shopping grew by 84.5 percent in the first quarter of 2021 compared to the same quarter of the previous year. The segment thus achieved sales of 666 million euros. No product group is growing as fast online as groceries. Customers are also willing to make more compromises, says Rainer Münch, retail expert and partner at the Oliver Wyman management consultancy in Munich – be it in the quality of the offer, awkwardly located delivery windows or even higher prices. “This is causing many providers to rethink,” says the retail expert. “I would rather cannibalize myself than let the competition do it.”