The instant purchase and delivery of food and other essentials has been one of the great bubbles of opportunity in the ecommerce world over the past year, with dozens of startups, large and small, emerging. and fundraising to start businesses and bring in items like groceries. , toilet paper and Tylenol on people’s doorstep in 30 minutes or less. Now, a startup called Arive is applying this concept to the wider world of consumer goods in a Prime Now-style service – partnering with high-end stores and brands to sell and deliver items like Apple electronics and headphones. Bose, Lululemon sportswear, furniture and cosmetics and bath products and Van Moof e-bikes, then delivering items through its own courier – announces a $ 20 million Series A to see if the idea finds a support beyond the essential.
The funding is led by Balderton Capital, with Global Founders Capital (the company related to the Samwer family of Rocket Internet), Burda Principal Investments, La Famiglia and 468 Capital also participating. (La Famiglia and 468 Capital are recurring backers of Munich-based Arive, both having invested in the company’s funding round, not to be confused with the mortgage start-up of the same name in the United States. United)
Arive’s funding and list of backers are notable in that they are based on a fairly limited run so far. The startup was launched just four months ago and is currently only active in four cities in Germany – Berlin, Hamburg, Munich and Frankfurt – although the idea now is to use the investment to grow further. across the country and start thinking about other markets to tap into. then tackle.
The reason for the vote of confidence is that the numbers so far look promising. Arive does not disclose how many customers it has or what its revenue looks like, but it does note that the average order size is between â¬ 50 and â¬ 100 ($ 56 and $ 113) out of some 1,000 referrals, the medium basket containing between one and four items. This presents what Arive does as a very different proposition than what, say, a GoPuff or Getir hopes to achieve with their instant delivery model, essentially replacing the weekly grocery store with multiple baskets delivered to their doorstep.
âIt’s not just about being the next rapid commerce vertical, but building the next generation of e-commerce,â said Maximilian Reeker, who co-founded Arive with Linus Fries (the two co-lead the company ). He described this new generation like this: âVery convenient delivery of between 30 and 60 minutes, connecting people to local stores with bicycle service, in an app optimized for the phone. All of its couriers are employed by the company, full or part time.
Arive has so far split the model into three parts, offering consignment, wholesale options, and within the next 2-3 months, market options for supply. Fries said that currently the wholesale portion accounts for most of their business and sales.
Beyond that, white-label services – where Arive could sell its backend technology and delivery infrastructure to third-party retailers to create their own instant delivery services – is another area the company is considering, Fries said. . This could be a very exciting opportunity in areas such as fashion: Online clothing sales have typically faced issues with sizing and handling returns, which is a high barrier to entry for a business like Arive. without making large and targeted investments to address them. What it could do, however, is provide its technology to the fashion brands and retailers who have made it, who are considering ways to get clothes to potential online shoppers faster.
Meanwhile, although it takes a different approach in instant delivery by avoiding groceries and basic necessities and focusing on slower, more expensive consumer goods, Arive still works with these startups. grocery delivery in mind for another reason.
Reeker told me that Arrive is actually savoring the oversupply of these startups in certain markets – indeed, the bubble has definitely started to burst for some of these startups, as they are captured by much bigger and highly capitalized rivals. looking to expand into new geographies – as they become a signal of where Arive should consider expanding.
âWe want to go to more places in Germany and expand internationally, and while we haven’t decided which cities, we are looking at those where existing grocery parts are live,â Reeker said. âThe UK, France, they’re all interesting. Having these grocery stores there is a plus for us because it’s proof of the shift in consumption that has taken place. They are already used to getting their food quickly, which is the first step.
Arive is not the first company to consider creating a service around the instant delivery of virtually any type of item a person could wish to have without leaving their home to purchase it. This was basically the premise behind Amazon Prime Now, which the e-commerce giant launched the service in 2014. In fact, although Amazon expanded it to multiple markets, it ultimately ditched the standalone app and branded. he created for Prime Now, which is now in existence. as a faster delivery option for some of the items it sells through Prime.
The message could be interpreted in two ways. This could indicate challenges in scaling something like a fast delivery service without also providing a wider range of options offering cheaper options and longer delivery times to customers turned off by the premium who comes with the moment.
Or, it could indicate that there remains an opportunity for a smaller, more focused business to get the right model, knowing that the market has matured over the past eight years and consumers are not only more willing to buy in. online than ever due to Covid-19, but focused their expectations on how this experience should more closely mirror the instant gratification of in-person purchases.
Investors are willing to bet that the two co-founders – who came up with the idea for Arrive while they were in business school – have a chance to build something that matches it.
âLinus, Max and the entire arive team challenge the conventions of e-commerce with energetic execution and a keen sensitivity to the priorities of modern brands,â said Colin Hanna, partner at Balderton Capital, in a statement. âUsing lightweight electric vehicles to fill orders quickly leaves a lighter footprint on our planet and ensures that customers are at home to receive the goods they have purchased online, avoiding costly missed deliveries. The team is also committed to building their UX in a way that protects, rather than erodes, the value of the brands they are fortunate enough to work with. Finally, the large basket sizes and the lack of waste means the company has a much stronger path to a long-term sustainable business model. Balderton is fortunate to support Arive as he moves rapidly across Europe.