Thursday last week Mail.ru Group and Sberbank announced that O2O, their ride-sharing and food delivery joint venture, completed the acquisition of Russian food delivery startup Samokat.
Following approval from corporate bodies and antimonopoly authority FAS, O2O now owns 75.6% of the service. The remaining shares (24.4%) are in the hands of Samokat’s founders and managers.
The transaction offered an exit for PIK Group, a major residential property developer which invested an undisclosed amount in Samokat less than a year ago.
Operating in Moscow and St. Petersburg, Samokat claims to serve its customers “within 15 minutes,” with couriers delivering orders by foot, bikes and scooters. (‘Samokat’ means ‘scooter’ in Russian.)
The company’s activity grew by 30% monthly even before quarantine measures were introduced in the two cities, noted Mail.ru Group General Manager Boris Dobrodeyev.
There are thousands of SKUs in Samokat’s assortment, which meets the common range of products available in brick-and-mortar vicinity stores. The startup touts itself as the leading dark store company (retail distribution centers or outlets catering exclusively to online shopping) in Russia.
Hot meals, hot market
The Russian food delivery market was booming even before the coronavirus crisis hit the country in March, 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.
These trends triggered investors to chase Russian food delivery startups. In the summer of 2019, iGooods attracted nearly $5 million from Joom, a Russian-founded international marketplace, while PIK made its investment in Samokat.
In the spring of this year, Elementaree.ru raised $5 million from the French vegetable giant Bonduelle and Russia’s sovereign wealth fund RDIF.
Russia’s largest tech companies also jumped in. In late 2019 Sberbank launched its own delivery service, ‘SberMarket.’ Focusing on grocery products and essential items, the service is available in dozens of Russian cities. More recently, O2O invested in food delivery service Localkitchen.ru (“Kukhnya na rayone”).
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.
In April 2020, as consumers switched to online to buy groceries amid the pandemic, X5 Retail Group’s online sales were nearly five times as high as in the same month of the previous year.
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.
