French meals supply startup Epicery will stop operations Tuesday, after one final vacation season hurrah for its shoppers and the native meals companies that had been utilizing the platform throughout its 9 years in enterprise in change for a 25% fee.
In a message asserting the choice to prospects earlier this month, Epicery’s workforce stated that it was “the results of the financial and monetary challenges we now have been dealing with for a number of months, and which, regardless of our greatest efforts, we now have been unable to beat.”
With a deal with premium groceries and native deliveries, Epicery suffered when inflation made prospects rethink their meals spending. Even after ceasing operations in some cities, it had a damaging Ebitda of -€4.69 million in 2023, on gross sales of €2.57 million.
Earlier than these difficulties, nevertheless, the startup reached sudden highs when France went into lockdown through the COVID-19 pandemic. It was nonetheless using that wave in late 2021 when Geopost/DPDgroup, the specific parcel supply department of Groupe La Poste, which handles France’s nationwide postal service, took a majority shareholding within the firm.
The company alliance made sense on the time: Geopost was additionally an investor in last-mile supply service Stuart, of which Epicery was a heavy person. However in latest months, La Poste lower ties with a number of startups it beforehand invested in, and particularly, bought Stuart at a big loss.
In a press release shared with TechCrunch, Geopost said that the choice was made “following an in-depth evaluation of [Epicery’s] monetary and working efficiency” resulting in the conclusion that “the subsidiary’s short- and medium-term profitability has been severely impacted by developments within the meals supply market, a gradual post-COVID return to direct consumption from native outlets, and powerful competitors within the catering section.”
Meals supply in France in 2024 appeared vastly totally different in comparison with Epicery’s first years (it launched in 2016). On the time, its rivals included Take Eat Straightforward, which ceased operations in 2016, however Deliveroo and Uber Eats had been nowhere in sight, and fast commerce hadn’t gone via its rise and fall. Whereas Cajoo, Flink, Gopuff, and Gorillas not function in France, their advertising presence was laborious to flee for fairly some time.
Compared, Epicery’s scale and visibility had been at all times modest. It had some 25,000 recurring prospects, shopping for from some 1,100 native outlets, principally in Paris and Lyon after it scaled again on its nationwide enlargement. This might have made sense as a standalone, way of life enterprise, however arguably much less in order a VC-backed one, and even much less in order half of a giant group the place numbers like these hardly transfer the needle, particularly with the Stuart synergies gone.
Epicery co-founder and CEO Édouard Morhange wasn’t in a position to touch upon strategic facets resulting from a non-disclosure settlement. In a private assertion, nevertheless, he commented on Epicery’s legacy. “I’m very proud to have launched native retailers to ecommerce over the previous 10 years, and I’m assured that they’ll proceed to develop their digital gross sales over the approaching years.”
Morhange will stay lively within the meals sector, saying he’s at present engaged on “an formidable new mannequin that may allow the meals trade to pursue its digitalization in France and overseas.” As for Epicery’s workers, Geopost stated that every of them will obtain “assist from the HR groups to debate alternatives throughout the Group or to assist them discover a job.”
French entrepreneur Nicolas Machard, whose meals market Pourdebon is additionally a subsidiary of Geopost, stated he’s assured that Epicery’s workers will quickly land new roles. He’s additionally assured that Geopost and Pourdebon are nonetheless a fantastic match, mission-wise and economically. Not solely is Pourdebon a heavy person of Geopost’s meals supply service Chronofresh, however it’s also on observe to achieve profitability in 2027, and can possible work on reaching that milestone earlier.
Epicery didn’t handle to make the mathematics work on the profitability entrance, but it surely typically introduced as much as 10% and even 20% in gross sales to native outlets it labored with. In response to Elsa Hermal, who co-founded Epicery with Morhange and VC Marc Menasé earlier than leaving operations in 2019, this was a vital milestone.
“What’s great, and what’s essential to me, is that what we promised [shop owners] on the very starting, and what took us a very long time to attain, has now develop into an necessary a part of their enterprise,” stated Hermal, who’s now a enterprise coach and affect investor, additionally via local weather fund Satgana.
As an investor, Hermal is aware of that Epicery was working in a posh area of interest however doesn’t suppose it’s a no-go. “Logistics companies are difficult and difficult by way of metrics, however that doesn’t imply it could’t be performed.” Now that native companies have had a style of this, and in a context the place each sale counts, it wouldn’t be too shocking to see an Epicery-like mannequin make a comeback sooner or later.
