A number of grocery delivery companies have been popping up all over the Big Apple the past year and they have something in common. They get your grub to you fast, within 15 minutes or less, and the fees are reasonable.
Hungry people who hate going to the grocery store are digging these new companies, and so is Wall Street. Jokr is one of the upstarts that was launchd in June. It’s already picked up $170 million in financing.
Which is nothing in comparison to another new company called Gorillas, which picked up $1 billion in investment cash in October.
Which is nothing compared to GoPutt. Which had a valuation in July of $15 billion.
Here’s the secret of how the deliveries can happen so quickly. These instant delivery companies don’t go pack up their little coolers at the local Whole Foods or Albertsons. They build micro fulfillment centers that are essentially a grocery warehouse, used only for the delivery companies.
According to a Morning Brew story, these so called dark stores (because they are not open to the public) are filled with inventory that is most in-demand.Between 1,500-5,000 SKU’s, which is a fraction t the normal 30,000 or more items that are in your neighborhood grocery store.
Another interesting aspect of these new companies is there employees are full-time, not gig workers like Uber, Postmates and others.
The service is popular because of the low or in some cases non existent delivery fees and no minimum orders.
None of these new companies are close to being profitable yet. They are hemorrhaging cash, figuring out the details of how to do it and not worrying about the economics.