‘Unprecedented Interest’: How Weezy Is Navigating The Red-Hot Grocery Delivery Market
When Alec Dent and Kristof Van Beveren were setting up Weezy, an on-demand grocery delivery start-up, the two worked a few Deliveroo shifts “just to see how it works.”
The duo needed a deeper understanding of delivery, logistics and the time it takes to get from A to B on a bike or a moped.
Weezy wanted to deliver groceries in cities in 15 minutes or less.
The London-based start-up is one name among many that have popped up over the last year in the UK and Europe promising rapid deliveries of groceries in 15 minutes through a network of couriers and ‘dark stores’ or fulfilment centers.
Demand for food and grocery delivery skyrocketed since early 2020, thanks in large part to lockdowns and people being cooped up indoors. Established players like Ocado benefitted but for start-ups like Weezy, and rivals Dija and Zapp, there was still a gap to be filled.
“The basic principle of Weezy is you only need to buy what you need so there’s no need to forecast your whole week’s shopping with one big weekly shop,” Dent said. “You buy only what you’ll consume.”
Weezy launched last year and quickly tapped into this demand. It’s a demand that swiftly caught the eye of venture capital investors too. Weezy raised $20 million in Series A funding led by Left Lane Capital.
In such a frothy and competitive market, Van Beveren said trust is a major factor with customers that opt to use the service over running to the shops themselves as its fulfilment centers don’t stock as many varieties of goods as a traditional supermarket.
“That means every individual company that is doing this will have to make these [product] choices on your behalf and then this comes to down a question of trust,” he said, likening it to the early days of online shopping.
“It’s that level of trust that you need to achieve to an even bigger magnitude here because it goes down to product selection.”
The race for quick delivery while not skimping on quality is what will separate the wheat from the chaff in this new wave of delivery start-ups and ultimately determine which ones have longevity.
The ever-present challenge is the physical logistics and meeting that high-speed delivery target.
“No one has access to anything more than anyone else, which are the roads network and we’re all using that. We didn’t develop some subterranean tunnel network and neither did any of our competitors,” Dent said.
“The simple solution is that we place our fulfilment centers very close to where our customers are, which means we limit the distance that someone can order from a Weezy fulfilment center in order to make sure that it’s very easy to deliver in 15 minutes.”
Harkening back to Dent and Van Beveren’s stints working for Deliveroo, Dent now believes the gig economy model for riders isn’t viable for grocery delivery.
“This is why we don’t do the gig model because with the gig model, you’re incentivizing people to speed around like crazy because the more they do that, the more they earn,” he said.
“We’re paying people per hour so there isn’t that incentive and we’re placing our fulfilment centers close to customers so that essentially when you leave the fulfilment center, the max travel distance is about seven minutes by bicycle.”
Weezy’s delivery riders are classed as workers, a key differentiation from the gig economy contractor model seen in much of the on-demand delivery space.
“You get holiday contributions, pension contributions but it’s not a full-time contract so it’s shift-based work, the same that a waiter in a restaurant would be getting,” Dent said.
The model could also shield Weezy from any shocks to its business model if any further regulatory changes are made to the status of delivery riders and the gig economy as a whole. The start-up does not disclose the number of riders it has.
Riders are the lifeblood of a start-up like Weezy. It has 20 fulfilment centers in London, Manchester, Brighton and Bristol and as the start-up expands its locations, it will require onboarding more riders. It plans to have 90 dark stores in the UK by the end of the year before looking at international expansion.
The company is still operating on its Series A funding but the founders said it is in the process of raising its Series B.
“All the investors we’ve spoken to say there’s unprecedented interest in this space so we constantly get inbounds and are discussing future funding rounds,” Dent said.