Deal Review: eGrowcery’s ready to add liquor and retail to its stable of independent grocers
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Operating in both Australia and the US, eGrowcery offers an online ordering and delivery solution that provides a Software as a Service (SaaS) platform to independent grocery retailers.
eGrowcery wants to give the shopper an efficient user experience while still honouring their relationships with independent grocery retailers.
Founded in Australia 2010, CEO Jerry Abbott recognised that independent grocery retailers were facing increasing pressure from technology-enabled competitors and from changes in the “omni-channel” buying behaviours of internet-connected shopper.
Considering this, Abbott developed a way to shift a retailer’s business model to a seamless online buying experience for the customer.
With the help of Primary Markets, eGrowcery is targeting a raise of USD$2.5 million with a pre-money valuation of USD$9 million.
The funds will be used to scale its global customer base with investments in product development, sales & marketing, administrative support and debt reduction.
eGrowcery’s online platform embodies a cloud-based technology structure, managing and fulfilling online customer orders. Working with independent grocery stores, it utilises the store’s staff and infrastructure to fulfil orders.
Its end-to-end solution replaces physical receipts and manual scanning with integrated payment capture, sales reporting, picking routes and substitution support.
With its software platform complete, eGrowcery is now poised for a rapid expansion phase.
eGrowcery has already contracted major supermarket wholesalers, including Supervalu (over 4,000 retailers in USA) and Associated Wholesale Grocers (over 3,800 retailers in USA). It now hopes to expand into other verticals such as independent liquor retailers and ancillary retail industries worldwide.
The global online grocery market was valued at USD$150 billion in 2017 and it’s expected to double by 2022. It’s an industry that has intensified with discount stores such as Aldi aggressively expanding along with new market entrances tapping into the brick-and-mortar space.
AmazonFresh (a subsidiary of the Amazon.com), is the heavyweight player in this sector, offering online delivery services in some US states, London, Tokyo, Berlin, Hamburg and Munich.
While eGrowcery has recently contracted major supermarket wholesalers, further expansion will undoubtably come with challenges from other major players in this fiercely competitive industry.
Any investor must consider whether the business has the required resources to facilitate sufficient growth to achieve a break-even position or better.