Grocery delivery giants look to consolidate as market heats up

GoPuff recently announced it was acquiring UK rapid grocery delivery startup Dija, but fresh consolidation is expected as the industry continues to rake in investment.

Dija has only been operational for eight months marking an exceptional success story in what has been a saturated market.

The deal comes months after GoPuff’s acquisition of Fancy back in May which gave the US based company an opportunity to compete with Europe’s biggest e-grocers including Deliveroo and Uber Eats.

The acquisition of Dija is expected to close within the next 30 days and will give GoPuff around 40 micro-fulfilment centres and 200 employees in the UK, France and Spain.

Startups such as Weezy, Gorillas, Getir, Zapp and Fancy have all broken into the scene with individual success all round over the last 12 months.

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However while the startups clamber over each other at the bottom of the pile, the league’s major players are seeking to find new ways of increasing their market shares including acquiring their rivals and delivering other verticals as the market heats up.

For example, DoorDash, another leading food delivery courier in the US is aiming to compete with ecommerce giant amazon on delivering home goods and flowers as well as grocery and convenience options, according to Bloomberg.

DoorDash has also recently held talks to buy US grocery giant Instacart in deal which was rumoured to be around $50 billion.

However the deal fell through due to a fears of a potential antitrust investigation after it also acquired Fancy and now Dija as well as the amount of consolidation that has been occurring in the industry so far.

While the company was unsuccessful in its bid to acquire one of the US largest egrocers in Instacart, it plans to take a stake in German-based Gorillas as competition laws do not apply when acquisitions are abroad.

If successful, GoPuff’s investment in Gorillas would mark its third within the last six months as it clearly tries to establish itself alongside market leaders Deliveroo and Uber Eats, the former announcing last week it had has seen revenues skyrocket 82 per cent over the first half of the year.

Watch Charged’s summation of the rapid grocery delivery space here.

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