Grocery App Flink Raises $106 Million, Explores Sale to Rivals

Arno Schütze and Shona Ghosh, Bloomberg News

A Flink SE cycle delivery courier during freezing temperatures in Berlin, Germany, on Monday, Jan. 8, 2024. The Arctic blast that caused havoc across the Nordic region last week has spread south to cover most of continental Europe. , Bloomberg

(Bloomberg) -- Investors in Flink SE have committed to pumping a further €100 million ($106 million) into the German grocery delivery startup, extending its runway as the sector struggles with rising costs and sluggish demand, people familiar with the matter said.

The company has also been in discussions with potential merger partners, said the people, who asked not to be identified as the talks are private.

About a third of the financing has already been paid out, they said, adding that two further tranches could follow depending on the outcome of ongoing sale discussions with Turkish rival Getir and Dutch food delivery company Just Eat Takeaway.com NV.

The round was led by Flink’s existing backers, including German grocer Rewe Group, and venture capital investors Bond, Northzone and Cherry Ventures, the people said. Abu Dhabi’s Mubadala Investment Co., also a Getir backer, and US food-delivery player DoorDash Inc. did not participate, they said. Some early details of the financing were reported by Business Insider and Handelsblatt last year.

Flink and the investors declined to comment. Bond and DoorDash did not respond to a request for comment. A spokesperson for Rewe said the company was open to financing Flink further as well as merging it with a peer. Getir declined to comment. Just Eat Takeaway declined to comment on Flink, but Chief Executive Officer Jitse Groen told reporters in a call on Wednesday to expect more dealmaking in the sector.

“Unfortunately for us Europeans, the valuations in Europe are much lower than they currently are in the US and that will create obviously some consolidation globally,” he said.

Flink is one of the few remaining rapid delivery startups in Europe, where apps promising groceries in 10 minutes proliferated during the pandemic. Like its rivals, Flink offers a limited selection of groceries via an app, shipping these out from small local warehouses via couriers on bicycles. Despite often attaining high valuations, some startups struggled with low margins, high customer acquisition costs and differentiation from the competition.

As interest rates rose, companies have either shuttered or sold to better-funded rivals. With further funding, Flink may be looking to outlive the competition in the markets it operates in.

Flink has raised $1.4 billion to date and was valued at about $2.85 billion in late 2021, according to PitchBook data.

--With assistance from Ercan Ersoy and Sarah Jacob.