From $19 billion in funding in 2021 to $2 billion in 2024 – what lies ahead for eGrocery innovation?

As consumers have been stuck at home during the Covid-19 pandemic, e-grocery startups—delivering essential food and household items to your doorstep—have proliferated.

Funding for the category grew to nearly $19 billion in 2021, a 35% share of the entire agri-food technology industry, bolstered by a broader venture capital boom this year, according to AgFunder. Because the phenomenon has been global, the category has soared above others in most parts of the world during that same time.

But how is this category faring as the world recovers from the pandemic and populations around the world return to “normal” daily life?

From necessity to lasting trend

Demand for eGrocery services has not significantly decreased since the end of the pandemic. In fact, it will increase over the next few years.

Convenience continues to reign supreme, with consumers accustomed to buying everything they want within days on sites like Amazon now wanting the same for food, but within hours or even minutes. Online grocery shopping and food delivery are expected to outpace offline, brick-and-mortar growth in the coming years, at a compound CAGR of 16% between 2023 and 2030, compared with an expected 2% for offline grocery shopping, according to McKinsey’s 2024 State of European Grocery Retail report.

This is a promising scenario, leaving plenty of room for innovation to meet the needs of increasingly demanding consumers. Examples include automated warehouses, inventory management systems, and machine learning algorithms to predict demand, optimize delivery routes, and provide personalized recommendations.

Competition was fierce. Major players vied for market share, grappling with low margins, costly logistics and the need to be profitable. The result was some epic fails (see, for example, Getir’s well-documented exit from Great Britain AND United Statesand less loud busts Packed AND Free ), while other companies went through mergers and acquisitions (Gorillas, FreshGoGo, Mercatus(among others).

Surprisingly, despite consolidation and the dominance of a few major players, investments in eGrocery startups still account for almost 16% of agrifoodtech funding in 2024 so far. Let’s dive into the details.

eGrocery Startup Financing in Numbers

$47.9 billion: total amount collected in eGrocery over 10 years

22%: eGrocery startup market share among all agro-food technologies over 10 years

$18.8 billion: eGrocery Financing in 2021

$1.7 billion: eGrocery Financing in 2024 (until September 15)

2023: The only year in a decade that eGrocery was NO best-funded agrifoodtech category. Ag Biotech had $2.2 billion, just $200 million more.

2458 transactions in 10 years: dThe number of people employed in this sector peaked at 393 in 2021; in 2023 it fell to 139. So far in 2024, only 38 deals have been completed, which means fewer but larger deals.

$23.6 million: Average eGrocery Transaction Size in 2024 (excluding $1B outlier)

eGrocery in the Rebuilding Phase?

The category appears to have bucked the downward funding trend from 2021 this year, raising $1.7 billion to date and taking a 16% share of agrifoodtech, up from 12% in 2023. It’s unclear whether it will top last year’s $2 billion total, and it’s still ahead of Ag Biotech, which has now raised $1.9 billion.

This year, emerging markets and Europe have led the way in eGrocery funding, with India leading the way with $1.1 billion raised across 11 deals – Zepto raised $1 billion of that in two late rounds, one in June AND one in augustThe Netherlands is in second place with $388 million, although this came from one large deal; Germany is in third place with $106.7 million, also from one deal; the United States is next with $54.6 million from six deals and France is fifth with $52.6 million from four deals.

10 years of global investment in eGrocery

Over the past 10 years (Q4 2014/Q3 2024), China has raised the most funds for eGrocery startups, with $14.1 billion in 165 deals. However, eGrocery financing activity in the world’s second-largest economy has completely collapsed, with no deals reported to AgFunder in 2024 so far and only $7 million raised in 2023. This may be due to a change in the local financial climate, as well as a lag in reporting.

The United States raised $12.1 billion in 637 deals over the decade, while India ranks third with $6.5 billion distributed across 368 deals.

Germany is the most active European country in eGrocery funding, investing $3.6 billion in 62 deals. Turkey is fifth with $1.8 billion split between 21 deals.

Is eGrocery dead for new entrants?

Seed funding is on the decline in the sector. In 2020, there were 172 seed deals, compared to just 217 in 2021 and 149 in 2022, despite the investment boom in those years. That number has fallen to 88 in 2023 and 14 in 2024, indicating that the sector could be saturated with new entrants

Best deals of 2024 so far:

ZeptoFounded in 2020 in Parel, India, the company first acquired $665 million in Junethen another one $340 million in August this year. Two subsequent funding rounds allowed the startup to secure more than $1 billion in 2024, bringing its revenue to date to $1.6 billion. Zepto offers a ten-minute grocery delivery service with an app that has over 2,500 products. The company’s vision is to become the go-to platform for consumers looking for fast, reliable grocery delivery, while creating a robust supply chain and operating model that can scale across markets. The company is now valued at over $5 billion.

Picnic. Founded in 2015 in the Netherlands, the company raised $388.1 million in January in a late-stage round of funding. It has raised $1.5 billion in total. Picnic is a fast-growing technology company that has developed a mass-market home delivery system for fast-moving consumer goods.

Flink FoodFounded in Berlin in 2020, the company raised $106.7 million in April via a Series B round. It has raised around $1.3 billion to date. Flink has developed an online platform for delivering multi-category grocery products. Its app offers a wide range of convenience items, such as fresh herbs, fruits, breads, basic necessities and household items, delivered to your door in ten minutes. The company currently operates in the Netherlands, Germany and France.

La FourcheThe French startup, founded in La Corneuve in 2018, raised $26 million in Series C funding in March, bringing its total funding to $38.1 million. The startup’s mission is to provide affordable, everyday organic products to a large customer base through a subscription model. Its platform offers thousands of organic products at discount prices through a network of partnerships with producers and growers.

RoseFounded in Delhi in 2021, the company raised $22.5 million in Series A funding in March, taking its total funding to $26.5 million. The startup is a rural e-commerce platform that focuses on building exclusive partnerships with peers to leverage social networks and local communities for market expansion. With a mission to provide convenience to underserved communities, Rozana started with a few villages and has since expanded its reach to 14 districts covering over 13,000 villages and now plans to expand to 35,000 with an aim to become the preferred channel for D2C brands in rural India.

Country DelightFounded in 2015 and based in Gurgaon, India, the company raised $8.4 million in August 2024 in debt financing, after securing $9.1 million in May and $19.8 million in January in two later rounds, bringing its total funding to $37.2 million in 2024 and $195.4 million in total. Country Delight started as a dairy tech startup, distributing cow and buffalo milk, ordered through an app and delivered directly to customers’ doors. Over time, it has expanded its product list and now delivers fresh fruits and vegetables, as well as other grocery items such as eggs, flour, baking mixes, butter, ghee, oil, bread, pulses and more.

One orderFounded in Cairo in 2022, the Egyptian startup raised $16 million in a Series A funding round in May, bringing its total funding to $26.5 million. The company is a wholesale distributor serving the HORECA sector, offering reliable quality supplies to the industry, with built-in financing, at a fixed price and without the stress of managing multiple suppliers, all via one user-friendly application.

JowThe French startup was founded in Paris in 2017. It raised $13 million in a Series A funding round in February and has raised $40.6 million to date. The company created an app that aims to simplify shopping and offer advice on what to eat, as well as recipes tailored to the customer’s taste. It automatically creates personalized menus of recipes and fills users’ baskets with the ingredients needed to prepare the dishes.

Good BonoFounded in 2020 in Paris, this next French startup raised $10.9 million in Series A funding in March, bringing its total funding to $19.2 million. The company offers a wide range of seasonal produce purchased directly from farmers at low prices, allowing them to sell discarded produce while also providing customers with access to affordable organic produce, helping to reduce food waste.

InsidiousFounded in Chicago in 2015, the American company raised $8.7 million in a Series B funding round in May, bringing its total funding to $24.8 million. Crafty is a centralized workplace platform that enables food, beverage, and delivery management for in-office, remote, and hybrid teams worldwide. Founded in 2015, the company currently manages over 260 international client offices and serves over 300,000 employees per month.

DakiFounded in 2020 in São Paulo, the Brazilian startup raised $5.1 million in a late-stage funding round in January, bringing its total funding to $105.1 million. Daki is a fast delivery service that offers a wide selection of food products at competitive prices through its mobile app. It promises delivery to customers within 15 minutes.

Oat box was founded in 2014 in Montreal, Canada. In April, it raised $3.7 million in a Series A funding round, bringing its total investment to $15.4 million. The company is to offer healthy, sustainable Canadian oat-based foods, providing a wide range of products including milk substitutes, breakfast cereals, handmade granola, oatmeal, breakfast bars, steel cut oats and much more.

Further reading:

Agribusiness and eGrocery markets continue to lead agri-foodtech VC funding in India, but bioenergy and biomaterials are gaining ground