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Food tech startup Deliverect raises €16.25M, to open office in Paris and expand in North America

Akansha Srivastava by Akansha Srivastava
April 29, 2020
in News, (Crowd)funding
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Food tech startup Deliverect raises €16.25M, to open office in Paris and expand in North America
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Deliverect — the ‘Adyen of food delivery services — that helps restaurants by managing multiple delivery services via its online food delivery management software platform, has just now closed a new funding round. The Ghent-based startup has announced to have raised €16.25 million in its Series B funding round. The investment was led by OMERS Ventures, along with existing investors including Newion, Smartfin, and the company’s founders also participating. 

In an exclusive conversation with Silicon Canals, Zhong Xu, CEO and co-founder, Deliverect revealed, “While we were in talks before, but we closed this round at the peak of the pandemic. The lead investor is amazing, as well as our current and existing investors. They saw growth in the business, even in these extraordinary times and also saw that Deliverect is snowballing, so to build further, everyone decided to hold their nerve and make this round happen.” 

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With this, the Belgian startup has scored a total €19.9 million as an investment. Founded in September 2018, Deliverect integrates with most of the significant delivery players in Europe, including Takeaway.com, Deliveroo, Uber Eats, Glovo, Delivery Hero and Just Eat.  

Hiring in the pandemic

The company, which has a team of 57 people around the world, will use the investment to support further R&D and product development, solidify their position in Europe and look into international expansion including North America. Also, OMERS Ventures’ Managing Partner, Jambu Palaniappan will join the Deliverect board. 

Talking about hiring in the pandemic, Xu says, “I think by the end of the year we’re going across the hundreds on board and our teams are based in different offices from Ghent in Belgium to London, Madrid, Toronto, New York, even Edinburgh in the UK.”

He adds, “We are even hiring right now, we have added five employees this week itself. Lots of restaurants are closed currently with the only restaurants still open are those doing takeouts and deliveries. So, we are supporting and proving solutions to as many restaurants doing deliveries, which is our forte, so it’s keeping us quite busy.”

On further fund utilisation Xu says, “Being a product company, we will invest in our product development teams, and secondly, we will deepen our existing offices to support our customers and veterans, especially in Europe, as that’s a big focus.” 

Increase presence in Europe, Canada & US

Deliverect is also planning to open a new office in Paris. Xu reveals, “We are also opening a new office in Paris, which marks our presence in pretty much every big capital in Europe. We will have a local support team to support our bigger customers. And finally, I think, international expansion outside of Europe, starting with Canada, US, where we have already existing offices and customers, we’re going to expand. Being opportunistic, we will also look at other regions in Asia in the future, due to our enterprise customers like Unilever, we are already supporting them in New Zealand, Australia and around the world. However, our primary focus is product development and further growth in Europe and expansion to North America.”

Deliverect has processed more than 3.5 million orders since its inception, with UK customers including Absurd Bird, You Me Sushi, Taqueria, and Crêpeaffaire. In addition, the company works with Unilever, which through Deliverect is able to integrate with Deliveroo and Uber Eats and deliver Ben & Jerry’s and Magnum ice creams directly to customers. 

Xu adds, “In Toronto, we’re hiring full development teams, sales, customer success and more. During COVID-19, we are trying to ramp up, even quicker because there’s a lot of demand for online solutions.”

Commenting on the onboarding challenges related to the pandemic, Xu comments, “While it is a challenge during these extraordinary times to onboard people or get them started but as a software company, we already have tools like Slack and so many processes to set up for working remotely and train the teams. It’s a bit hard, as seeing them face to face makes everything better, but it is possible. So we can say, we’re expanding right now.”

Dark kitchens on the rise

Further, Deliverect is also used by ‘virtual’ kitchens. These are essentially delivery-only restaurants where, assuming good food, efficiency and technology play a critical role in helping build brand loyalty with customers. With the number of virtual kitchens on the rise and an increasing number of FMCG businesses and food retailers entering the delivery marketplace, Deliverect aims to become the global gateway for online food ordering and delivery. 

With the provision of online restaurant delivery at its core, in order to address the impact of COVID-19, over the past few weeks Deliverect has been on a mission to help hospitality businesses rapidly pivot to online ordering, following the closure of restaurant dine-in services enforced by local governments across Europe. The company has waived all set-up fees for its solution and launched new monthly – instead of annual – subscription plans which can be cancelled at any time. The tech startup has also waived set-up fees for its Click & Collect online ordering module, and is not charging anything for the first six weeks of use.

“We saw a lot of restaurants adopting online sales and a rise in online grocery deliveries, as well as dark kitchens or virtual kitchens where restaurants were setting up kitchens for online delivery only. During COVID-19 outbreak, if you look at the market, 90% or more of restaurants got closed and then reopened for online deliveries. And if that’s the way to go in the future, then post-COVID, maybe we should focus on these virtual kitchens more instead of investing a lot in the high street and bigger restaurants. That’s quite transformative until we find a permanent solution. As many end consumers aren’t going to flock to restaurants for a while as they will be still practising social distancing. So even if you have a big restaurant, you will have less customers. So while your turnover and margin is already super low, and will be hard to maintain, it’s important to find different revenue sources and going online, doing deliveries and click and collect is super important.” 

‘Big change of behaviour on both ends’

The company also believes to have noticed transformation in their target customers as well as their consumers. Xu says that restaurants are now more open to digital conversions and even consumer’s demands are shifting as they’re open to new ideas during the pandemic.

He says, “We saw a significant change, even in bigger restaurant brands as they now want to innovate quickly. They’re ditching their own processes to pivot to online quickly. Big restaurant brands have a lot of processes that can take weeks, but now they want to implement processes immediately. So that’s a big change of behaviour. On the other end, customers are also more open to ideas.”

‘Pivot’ is the key

When asked to share a tip for tech startups seeking funding right now, Xu says, “For those seeking funding, I would say, there are still quite a lot of VCs over there with big pockets. They do need to invest, and are looking for it. I think what’s important these days is not only to chase a high growth sales model, but also trying to find more profitability. If you’re in a high growth model, then you should calculate it and go for it. At the end of the day, it’s a balanced exercise but if you’re a good company for a market which is important, then you should still chase for, as it will get funds. Also, if needed, pivot your business model to meet the demands of the affected market. In general, I think entrepreneurs are very resourceful, and they know how to find solutions to help their customers.”

Main image credits: Deliverect

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