Rohlik Secures $170 Million to Enhance European Grocery Delivery and License Its Technology

The era of fresh grocery delivery startups has evolved, with the resilient players continuing to thrive and seek further growth. On Friday, Czech-based grocery delivery company Rohlik announced it had raised $170 million in new funding.

Rohlik, which translates to "baker" in Czech, has distinguished itself by operating smaller warehouses and partnering with local producers, such as butchers and fishmongers, rather than replicating a traditional supermarket inventory. True to its name, Rohlik even bakes bread at its distribution centers.

“To replace Rohlik, you’d need to shop at five different stores,” said Tomáš Čupr, CEO and founder of Rohlik, in an interview with TechCrunch. Rohlik offers around 17,000 SKUs and delivers within 1-2 hours of ordering.

Serving 800,000 customers in 2023, Rohlik plans to use the new funding to expand its presence in Europe, targeting launches in 10 additional cities over the next six years. In addition to expanding its service, Rohlik aims to enhance its technology, including logistics, analytics software, and robotics for sorting and picking, by licensing it to other delivery companies. This tech platform licensing initiative is set to launch later this year.

The European Bank for Reconstruction and Development (EBRD) led Rohlik’s latest funding round, with contributions from previous investors Sofina, Index Ventures, Quadrille, TCF Capital, and the European Investment Bank (EIB) under its Scale-Up Initiative. The EIB portion is a minority debt component, as described by Čupr.

While Čupr did not disclose the company's current valuation, it is higher than previous valuations but still under $2 billion. The last major funding round in 2022 valued Rohlik at approximately $1.3 billion pre-money. The total equity and debt raised by the startup is nearing $800 million.

This funding comes at a challenging time for the grocery delivery sector. The COVID-19 pandemic led to a surge in delivery service usage and investment, with around $19 billion funneled into the sector in 2021 alone, according to AgFunder. However, the post-pandemic period has seen many delivery startups struggle, downsize, or close altogether.

Despite these challenges, Rohlik has shown resilience and strategic growth. The company operates in Austria, Germany (under the brand Knuspr), Hungary, and Romania. Its units in the Czech Republic, Hungary, and Munich are profitable, with average revenue growth of 40% post-COVID-19.

Rohlik aims to reach €1 billion in revenue and positive cash flow by the end of 2024. While current revenue figures are undisclosed, the company is confident in its ambitious targets.

“We first partnered with Rohlik three years ago and have been continuously impressed by the management team’s execution and investment into proprietary technology, automation, and increasing use of artificial intelligence across its operations,” said Tamas Nagy, Director and co-head of equity investments at the EBRD, in a statement. “We are proud to support Rohlik’s growth and expansion plans in the years to come.”