Instant grocery delivery startup Zapp raises $200 million

U.K. instant grocery delivery startup Zapp has raised $200 million in a Series B funding round co-led by Lightspeed Venture Partners, 468 Capitali and BroadLight Capital. Atomico, Burda, and Vorwerk Ventures also participated in the round, alongside Formula One star Lewis Hamilton. 

The new funding round brought Zapp’s total capital raised to $300 million since being launched in 2020. 

Joe Falter, Zapp co-founder, said the company plans to expand to new “mega cities” like London or Amsterdam, where there is demand for bike couriers carrying more expensive essentials like beer, snacks and iPhone charging cables.

Zapp’s rivals include Turkey’s Getir, Berlin-based Gorillas, and US-based Gopuff. According to Zapp, Zapp’s average order is in the “mid-£20” region compared to “under £15” per order for Gorillas.

“We’re focused on customer experience. That is what is going to win here,” Falter said in an interview. He said he found it “funny” how its competitors have chosen to go after market share by effectively subsidizing orders by offering users multiple discounts to customers. “We don’t offer vouchers or discount products,” he said, qualifying quickly, “except for the first order, which is 50% off, but nothing like the repeat vouchering you’ve seen. We believe in customer experience, a supply chain that delivers much better products and on time, and an assortment that is relevant to convenience, more than trying to disrupt the weekly shop.”

“Convenience retail is one of the last segments of retail to move fully online, but is really having its moment post-lockdown,” said Rytis Vitkauskas, a partner at Lightspeed Venture Partners, in a statement. “As people return to their busy lives, rapid delivery allows them to ‘live in the moment’ and Zapp has been built from the ground up to harness this consumer behaviour and is seeing exceptional customer loyalty as a result. We’re thrilled to be part of the company’s journey as it brings a totally new experience to customers in the convenience grocery market and continues to invest for the long term.”