Lewis Hamilton invests in fast delivery of groceries Zapp

A courier for the UK-based fast grocery service Zapp.

Zapp

LONDON – British Formula 1 driver Lewis Hamilton has supported the launch of Zapp with fast delivery of groceries as part of a major $ 200 million investment in the company.

The London-based firm said on Friday it raised the fresh money in a Series B funding round led by venture capital firms Lightspeed Venture Partners, 468 Capital and BroadLight Capital. Existing investors Atomico, Burda and Vorwerk Ventures also participated.

Zapp did not disclose its valuation and declined to comment on the size of Hamilton’s stake.

The commitment from Hamilton marks a rare start-up investment from the F1 racing star. The Mercedes team driver has won seven World Drivers’ Championship titles and shares a common record with retired German driver Michael Schumacher.

Zapp’s service, founded in 2020, lets people buy snacks, drinks and essentials from so-called “dark shops”, small department stores built for the sole purpose of preparing online delivery orders. The app promises delivery times of as little as 20 minutes.

British Formula 1 driver Lewis Hamilton.

Bryn Lennon – Formula 1 | Formula 1 via Getty Images

Zapp is one of many upstart retailers in Europe competing for shoppers’ wallets with the promise of super-fast delivery. It competes against some well-funded rivals, including the Turkish company Getir and the German firms Gorillas and Flink.

Zapp claims that it is different from the competition as its app offers a digital alternative to the grocery store instead of an online version of a supermarket like Tesco or Sainsbury’s. The company currently operates in seven cities, including London, Amsterdam and Paris.

“With this new capital, we will focus on achieving profitability in our existing markets as well as bringing Zapp to new customers globally,” Zapps co-founder Joe Falter said in a statement.

The company said it also plans to use the new capital to improve its customer experience and supply chain. Last year, Zapp opened a 25,000-square-foot distribution center in London to keep goods flowing to its dark stores.

JPMorgan acted as financial advisor to Zapp in connection with the transaction, the company said.

Fast-delivery companies have experienced just as rapid growth since the beginning of the coronavirus pandemic. Getir was most recently valued at $ 7.7 billion by investors, while Gorillas achieved a $ 1 billion round of financing led by German food delivery company Delivery Hero, which valued it at over $ 3 billion. Meanwhile, DoorDash led a $ 750 million investment in Berlin start-up Flink.

As the space has become more crowded, there have been growing signs of consolidation, with Getir buying London start-up Weezy and Gorillas snatching French rival Friichti.

Technical investors and executives have begun to question the long-term sustainability of such start-ups. Tim Steiner, CEO of retail technology firm Ocado, said Wednesday that he sees “a little difference between all the players out there,” and is not surprised to see consolidation in the market.

“We do not see it as a winner taking the entire market,” Steve O’Hear, Zapp’s vice president of strategy, told CNBC. “Like the broader grocery market, there is room for different players, and customers have historically shown that they value choice.”

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