Dutch online grocery startup Picnic secures $388 million in funding for European expansion

Dutch online grocery disruptor Picnic announced Tuesday that it secured 355 million euros (equivalent to $388.02 million) in funding from its investors to expand its operations in both France and Germany. Notable backers in this funding round include The Bill and Melinda Gates Foundation Trust and Edeka, Germany’s largest supermarket group, Reuters reported.

The Netherlands boasts one of Europe’s fastest-growing e-commerce markets, with an estimated turnover of 36 billion euros expected by 2021. The trend of online shopping extends beyond electronics and clothing, with over 1 in 6 Dutch people opting for online grocery shopping. This surge is evident in the proliferation of Dutch supermarkets launching their online stores.

However, despite the growth in e-commerce and online grocery shopping, retailers have struggled to develop efficient urban distribution systems to meet the rising demand. Ineffectual strategies have led to multiple delivery vans congesting city streets, contributing to increased traffic and greenhouse gas emissions. Additionally, the existing delivery services are often unreliable, leaving consumers waiting for hours.

To address these challenges, Picnic was founded in 2015 by Bas Verheijen, Daniel Gebler, Frederik Nieuwenhuys, Joris Beckers, and Michiel Muller. The company’s mission was to align urban distribution with the escalating demand for online groceries. Picnic’s app enables customers to place orders, which are then delivered to their doorsteps at a scheduled time using small electric vans dispatched from distribution hubs.

Over the past decade, Picnic has successfully developed a widespread home delivery system for fast-moving consumer goods. The company has also crafted a distinctive online grocery delivery approach, bypassing physical stores entirely. They fulfill customer orders directly from automated distribution hubs to doorsteps, utilizing small electric vans. This not only streamlines operations but also contributes to a more sustainable and efficient system.

In September 2021, Picnic secured a significant €600 million (around $706 million) investment from a consortium of investors, including the Bill & Melinda Gates Foundation. The primary goal of this substantial funding injection was to propel the company’s expansion, with a focus on reaching more markets in Europe, particularly in Germany and France.

The success of Picnic can be attributed to several key factors. Their delivery model provides customers with a hassle-free shopping experience, featuring flexible scheduling and a commitment to freshness. The company also uses electric vans and automated hubs to further reduce the company’s environmental impact. Additionally, Picnic employs advanced software and robotics for efficient order fulfillment and logistics.

The involvement of the Gates Foundation underscores Picnic’s alignment with the foundation’s mission to promote global health and development. Picnic’s emphasis on sustainability and accessibility aligns with the foundation’s overarching goals of enhancing food security and mitigating environmental impact.

The company has already established distribution centers in Hamburg and Berlin, Germany, as well as Paris, France, solidifying its presence in the online grocery market. Picnic currently operates in over 200 cities spanning the Netherlands, Germany, and France. The company anticipates achieving €1 billion in annual sales by the end of 2024.