Cajoo raises $40 million for its instant grocery delivery service

Cajoo, a French startup, is seeking funding in order to compete more aggressively in the fast-growing new market of food delivery services. Surprisingly, the lead investor in today’s round is Carrefour, the retail giant. Headline (formerly e.ventures), as well as previous investors Frst and XAnge, are also participating in the round.

Carrefour’s cash infusion isn’t just about money. Cajoo will benefit from Carrefour’s purchasing network. As a result, Cajoo will be able to provide its consumers with a wider selection of goods.

Cajoo is a member of a growing number of businesses that are attempting to invent a new kind of grocery delivery. The firm runs dark stores and stocks its own inventory. Customers may now order items without having to worry whether they’ll be home to accept the delivery. A courier arrives 15 minutes later with your purchases.

Getir, Gorillas, Flink, Zapp, and a few other businesses compete with the firm. It also competes with traditional retailers’ online ordering systems indirectly. “It’s a category that’s very capital-intensive,” co-founder and CEO Henri Capoul explained to me. “We control the whole value chain. We have to create hubs in order to grow; we have to acquire goods if we want to expand.”

The goal of Cajoo is to solidify its strong market position in Costa Rica, with $40 million in the bank. The service is currently available in ten French cities: Paris, Neuilly-sur-Seine, Levallois-Perret, Boulogne-Billancourt, Lille, Lyon, Toulouse, Bordeaux and Montpellier.

The company, on the other hand, is already facing some competition in Paris. But Henri Capoul considers it market validation. “There are a lot of players who have raised a lot of money in a regulated market. We control all of our goods and must adhere to law. We can’t sell everything at a loss because we own it all,” he explained.

The company is doing everything to keep it a big, independent business in the long run, according to Henri Capoul. “European champions will be national champions first. Right now, some players are able to compensate for a lack of items by offering discounts. I’m confident that the future of this market will be led by three or four local businesses that are strong internationally.”

Cajoo is the first and only French company to operate on this scale in this industry. So it’s obvious that Cajoo views itself as a market leader in France first. But the firm is already looking at other regions, including Belgium, Italy, Spain, Portugal, or Eastern European countries.

But first, the firm wants to expand its staff. By the end of the year, the number of people working in headquarters will almost double. On this front, operations and delivery teams should expand fivefold.

Cajoo employs delivery personnel directly. However, the firm is also relying on partners, both contracting firms and freelancers. As a result, Cajoo faces several of the issues that Deliveroo and Uber Eats encounter.

Cajoo may be an excellent business idea, but consumers must determine whether it actually fulfills a vital need or if they’re just using it because it’s there. Over time, instant delivery providers might have a meaningful influence on physical stores.