Naspers unit Prosus has co-led a €223 million (R3, 8 billion) investment round in Norwegian e-grocery business, Oda. Oda also rebrands today from Kolonial.no. The startup based out of Oslo offers same-day or next-day delivery of food, meal kits and home essentials.
The funding round led by Prosus and SoftBank. Vision Fund 2. Existing investors Kinnevik and REMA both participated in the investment round managed by Carnegie.
As part of the transaction, Neil Cunha-Gomes, Investor at SoftBank Investment Advisers, and Roger Rabalais, CFO Food Delivery at Prosus Group, will join Oda’s board.
While the food delivery companies within the Prosus portfolio have all rolled out online grocery delivery, this represents Prosus’s first direct investment in an online grocery business, a market expected to reach $1.1 trillion by 2027.
Oda currently has a share of online grocery orders in Norway of over 70% and plans to use the funding to commence its international expansion. It has started construction of a state-of-the-art fulfilment centre in Finland and is due to launch in Helsinki later this year.
Oda also plans to launch its offering in Germany in 2022 and is in discussions with suppliers.
Oda can lay claim to being the most efficient online grocer in the world, registering 212 UPH (units processed per labour hour at the warehouse), compared to 169 UPH of the leading UK online grocer in 2020.
“Online grocery represents a large growth opportunity and compared to traditional e-commerce, is still in its very early days. Our expertise from operating and investing in e-commerce and food delivery companies for over a decade, many of which now have promising grocery delivery businesses, positions us well to capitalize on the opportunity in online grocery,” Larry Illg, CEO of Prosus Food, said.
“We have seen a significant inflection point with grocery over the last year with the market transitioning online, accelerated by COVID. Oda’s leadership and impressive growth in Norway paired with its groundbreaking technology and ambition to scale across Europe and beyond makes them an ideal partner to tackle the grocery opportunity over the coming years.”
Oda’s model for success is centred around the efficiency of its service and affordability for its customers.
Oda has therefore been built upon its own end-to-end customer experience and technology infrastructure, including its own fulfilment centre management system, routing system, and app for drivers (to ensure the delivery routes are environmentally efficient), and an app for consumers.
In addition, Oda’s waste levels are significantly below those of a standard supermarket; averaging below 0.5% in wastage (compared to the supermarket standard of 2%). In December 2019, Oda replaced plastic bags with cardboard boxes, and now scores 0% food waste on baked goods thanks to its in-house, demand-driven bakery.
It is introducing electric delivery vehicles, with the intention of operating a fully electric fleet by 2025. It also rolled out another environmental innovation in November 2020 when it created Norway’s first climate dashboard for groceries, allowing its customers to see a ‘receipt’ revealing the CO2 emissions of each item purchased and order produced.
“In Oda, we believe we have cracked the e-grocery logistics code to become the most affordable, the freshest and the greenest e-grocer in the world. We are thrilled to finally share the news of our funding and international expansion. This comes at a time when demand for our services, not just within our native Norway, but also internationally, is incredibly strong,” Karl Munthe-Kaas, CEO and co-founder of Oda.
“Our proprietary technology and automation, creates an extremely effective value chain from farm to fork, allowing us to compete profitably with discounters on price. This puts us in a unique position to win the global e-grocery race. We look forward to bringing our service to customers in Finland later this year, and Germany in 2022.”
Prosus brings a lot of expertise around food delivery to the online grocery space.
Prosus entered the food delivery market in 2013 and now has leading food marketplaces (3P) and first-party (1P) businesses globally in its portfolio.
Today Prosus’s food delivery businesses, including Delivery Hero, iFood and Swiggy, are the market leaders in 46 markets and each portfolio company has made significant investments in grocery and convenience delivery over the past year.
Recent investments by Prosus in the food delivery space include the announcement on 31 March that Prosus had acquired 20.37 million shares in Delivery Hero to offset current and future dilution of its existing stake.
Consequently, Prosus’s stake is 24.99% (22.24% on a fully diluted basis), which continues to position the group as the largest shareholder in Delivery Hero. Prosus has no intention to acquire further shares in Delivery Hero for the next 12 months.