The Russian food delivery startup Elementaree.ru has secured $5 million from the French vegetable giant Bonduelle and Russia’s sovereign wealth fund RDIF, confirming earlier announcements.
An undisclosed individual investor also took part in the deal, the Russian media reported. The details of the transaction were not disclosed.
Founded in 2013 by Olga Zinovieva and Silard Bushka, Elementaree received $300,000 from two Russian business angels two years later, then $500,000 in 2016 from an undisclosed investor. Funding rounds continued in 2017, with other prominent businessmen injecting $2 million into the startup, and in 2018 as Skolkovo Ventures also bet on the company.
Elementaree currently serves Moscow and the surrounding region. Amid the recent surge in demand for grocery products, the company is now selling discounted “quarantine food packs,” offering its customers to spend epidemic times “without panic.”
Hot meals, hot market
The Russian food delivery market was booming even before the coronavirus crisis hit the country earlier this month, triggering a dramatic increase of online retail activity in this field.
This market grew by more than 40% in 2018 and continued growing fast last year, according to DataInsight. Meanwhile, a series of important moves took place.
Food delivery startup iGooods attracted nearly $5 million from Joom, a Russian-founded international marketplace. PIK Group, a leading residential property developer, invested in a St. Petersburg-based e-grocery service.
Russia’s largest tech companies are also active. Last summer Mail.ru Group and Sberbank joined forces to develop ride-hailing and food delivery activities.
In late 2019 the bank – now a tentacular tech conglomerate – launched its own delivery service, ‘SberMarket.’ Focusing on grocery products and essential items, the service is available in dozens of Russian cities.
Yandex has its own food delivery service, called Yandex.Eda (Yandex.Eats), following the acquisition of the startup Foodfox in 2017. More recently, the company launched a new service called Lavka, spreading small warehouses across the capital. These are stocked with about 2,000 items and uses bike couriers to deliver orders in just 15 minutes, as reported by Bloomberg.
Meanwhile Perekrestok.ru, the online branch of a leading food retail network, grew at an impressive pace: in 2019, the company processed some 1.4 million orders, a threefold increase from 2018, as reported by its owner X5 Retail Group.
However, neither a booming demand nor generous funding are enough to ensure startup success. In late 2019 and early 2020, no fewer than three delivery startups shut down, as noted by East-West Digital News.
Update Sept. 11, 2020: Rusagro General Director Maxim Basov acquired a 5% stake in Elementaree, Rusven reported. The stake was bought for an undisclosed amount from US citizen Lawrence Lepard, who invested in the startup in 2015.
