Prompt purchase and delivery of food and other necessities has been one of the biggest bubbles of opportunity in the e-commerce world in the past year, with dozens of startups large and small and crowdfunding to create businesses to bring items like groceries, toilet paper and Tylenol to people’s doors in 30 minutes or less. Now a startup called Arive is applying that concept to a broader world of consumer goods in a Prime Now-style service — partnering with premium stores and brands to sell and deliver items like Apple electronics, Bose headphones, Lululemon active clothing, furniture, beauty and bath products, and Van Moof electric bikes, Then deliver the items via its courier service, for a $20 million Series A to see if the idea finds traction beyond the essentials.
Funding is led by Balderton Capital, with Global Founders Capital (the Samwer family-affiliated company of Rocket Internet), Burda Principal Investments, La Famiglia and 468 Capital also participating. (La Familia and 468 Capital are frequent backers of Munich-based Arive, both invested in the company’s initial round, which should not be confused with a mortgage start of the same name in the US)
Arive’s funding and list of backers is noteworthy in that it is based on a very limited extent so far. The startup launched just four months ago and is currently active in just four cities in Germany – Berlin, Hamburg, Munich and Frankfurt – although the idea now would be to use the investment to expand further across the country and start thinking about other markets to tackle after that.
The reason for the vote of confidence is that the numbers so far look promising. Arive doesn’t reveal how many customers it has or what its revenue looks like, but it does indicate an average order size of €50-100 ($56-$113) across about 1,000 volumes, with the average basket containing between One and four items. That presents what Arive does as a very different take on what GoPuff or Getir, for example, hopes to achieve with its instant delivery model, in which a weekly grocery store is replaced by multiple baskets delivered to the door.
“It’s not just about being the next fast-paced commerce sector, but building the next generation of e-commerce,” said Maximilian Recker, who co-founded Arive with Linus Fries (the company’s co-leaders). He described the next generation like this: “A very convenient 30-60 minute delivery, connecting people to local stores through a bike-based service, in a phone optimized app.” All of its carriers are employed by the company, either full-time or part-time.
Arive has so far divided the model into three parts, providing consignment, wholesale and, within the next 2-3 months, market options for sourcing. Fries said the bulk of its business and sales currently represent the bulk of its wholesale business.
Moreover, white label services — where Arive might sell backend technology and delivery infrastructure to outside retailers to build their own instant delivery services — is another area the company is considering, Fries said. This could be a very interesting opportunity in areas like fashion: Online apparel sales are usually challenged by volume and revenue handling issues, which presents a huge barrier to entering a company like Arive without making extensive and focused investments on their suitor. However, what it can do is provide its technology to the fashion brands and retailers who have it, who are thinking of ways to make clothes faster for potential online buyers.
Meanwhile, although it takes a different approach to instant delivery by avoiding groceries and FMCG basics and focusing on higher-ticket, slow-moving consumer goods, Arive still largely does business with these grocery delivery companies in mind for another reason. .
Riker tells me that Arive is actually enjoying the oversupply of these startups in certain markets — in fact, the bubble is definitely starting to burst for some of these startups, as they are being snapped up by much larger, well-capitalized competitors looking to expand into new geographies — because they It became a signal of where Arive should consider expanding to the next stage.
“We want to go to more places in Germany and expand internationally, and while we haven’t decided on any cities, we’re looking at those where the current grocery offerings are,” Reeker said. “The UK, France, they are all very interesting. Having these grocery companies is an advantage for us because it is evidence of the consumer shift that has taken place. They are already used to getting their food quickly, and that is the first step.”
Arive isn’t the first company that thought of building a service around instant delivery of any type of item a person might want without leaving their homes to buy it. This was the basis behind Amazon Prime Now, which the e-commerce giant launched the service in 2014. It’s worth noting that while Amazon expanded it to many more markets, it eventually discontinued the standalone app and brand it had created for Prime Now, which exists Now as a faster delivery option for some items you sell via Prime.
The message there can be interpreted in two ways. It can refer to the challenges of expanding into something like express delivery without providing a wide range of options that offer cheaper options and longer delivery times to customers who hold off through the premium that comes with Fawry.
Or, it could refer to how there is still an opportunity for a smaller, more focused company to get the model right, recognizing that the market has matured in the past eight years and that consumers are not only more willing to shop online than ever before due to Covid-19, but have focused Their expectations of how this experience should closely reflect the immediate gratification of shopping in person.
Investors are willing to bet that the co-founders — who launched the idea for Arive while in business school — stand a chance of building something that works for them.
“Linus, Max, and the entire team at arive challenge e-commerce conventions through proactive implementation and extreme sensitivity to modern branding priorities,” Colin Hannah, partner at Balderton Capital, said in a statement. “Using light electric vehicles to quickly fulfill orders leaves a lighter footprint on our planet and ensures that customers are at home to receive the merchandise they have purchased online, avoiding costly failed deliveries. The team is also committed to building their user experience in a way that protects, rather than erodes, the value of the brands Business they are fortunate to work with. Finally, large basket sizes and no waste means the company has a much stronger path to a sustainable business model over the long term. Balderton is fortunate to support growth as it is rapidly spreading across Europe.”