The UK food delivery market expanded 4.7% to € 7,45 bln, according to the latest Financial Times data, in a a structure dominated by well funded and competitive startups like Deliveroo which built a dominant position targeting restaurants that don’t have own couriers with a network of more than three thousand self employed cyclists. Deliveroo currently serves more than 2.500 London restaurants and attracted interesting investors like Yuri Milner, an early backer of Facebook, Airbnb and Alibaba, who was part of a group that invested a further $100m last year to fund expansion in markets in Asia, the Middle East and Australia.
Meanwhile the framework gets complicated, as Uber invests heavily in the food delivery market with Uber Eats already active in 18 cities and six different countries in the world, willing to spread the service all across Europe as soon as possible.
Local startups aren’t escaping the competition as well: We Deliver Local ltd was established in Sep. 2011 initially providing an e-commerce and delivery platform. Once found that the largest demand was for rapid delivery from convenience stores, the company developed the Beelivery concept and released the mobile app that allowed them to crowdsource drivers while enabling the product purchase from local shops for all the customers.
Launched in January 2015, Beelivery provides a 90-minute grocery delivery service to help the busy consumer connect with crowdsourced delivery drivers. With more than 10,000 registered drivers, the service is pretty good, and aims to lower the delivery time to just 30 minutes in the next business stage. Beelivery is now collecting funds via its equity crowdfunding campaign con Crowdcube (the company currently raised 84.000 GBP – 33% of its goal).
We got in touch with the company for an interview on their business plan, the challenge to position the service in a fast changing market and the increasing competition they’re facing. The feedback is really interesting.
How was your idea born? How did you start your company?
We initially launched the business as an ecommerce and delivery platform for local shops. We expanded to provide an ecommerce service for a few convenience stores in the summer of 2014. We saw a much larger demand for this service but found that most convenience stores did not have the ability to deliver themselves. We therefore decided to create the Beelivery concept to solve this problem. We built an app that would allow us to crowd-source for drivers and allowed them to purchase the products from any shop. We launched this in January 2015 and saw our first successfully delivered orders in February 2015. Since then we’ve been growing at an average of 15% each month.
How did you manage your funding needs and what’s your attitude towards the startup environment?
The entire business has been self-funded up until this point. I think that SEIS and EIS made bring big improvements for the ability of start-ups to raise capital, although I think we’ve still not yet seen the full benefits. UK fundraising is still nowhere near as easy as the US.
Why did you choose an equity crowdfunding programme and what’s your main goal in the long term period?
We’ve been initially building and growing it to that we can show traction when we come to raise investment. We have always had in mind that crowd-funding would be well suited to our type of business as we similarly crowdsource for delivery drivers within our platform. I have 10 years experience in business but this never required raising from investors. Therefore, my own business knowledge is more focused towards building and running a business rather than raising finance. Getting on a crowdfunding platform is by no means easy but it does make it a little more accessible for those without experience in fundraising.
What’s the market position of your service compared to the other players?
It’s difficult to tell. We’re the only UK company which provides this service nationwide. Therefore, outside of London and a couple of other cities, we’re the market leaders. We’re also the only company specifically focusing on groceries. We want to do this one segment really well to provide a faster delivery service than anyone else.
Where is the food delivery segment going? Uber Eats and other top players are expected to disrupt the service market, how do you see the next future of this service competition?
Thinking a little outside the box, I believe that we’re going to see the decline of your local delivery person employed directly by your takeaway and instead there will be an outsourced, efficient shared service (like Deliveroo) but provided by Just-eat or Uber. I don’t however think this will affect Deliveroo who’s value has been created through the partnerships with high end restaurants.