Unprecedented investment high for online grocery

Venture capital investments in online grocery delivery start-ups more than tripled between Q4 2020 and Q1 2021

Food and everyday essentials had long been a product category with a rather sluggish eCommerce development in many countries. According to the Statista Digital Market Outlook, back in 2019, only 15% of total global eCommerce revenues were generated by the Food & Personal Care product segment. Only Furniture & Appliances contributed a slightly smaller share. The coronavirus pandemic then disrupted everything, resulting in a year-on-year revenue increase of more than 44% in the global Food & Personal Care eCommerce market in 2020. The share that online sales contribute to worldwide Food & Beverages retail revenues will double within the next four years, according to Statista Digital Market Outlook Analysts. Maybe corona ignited the last missing spark that was necessary for groceries to really set foot in eCommerce. Many different business models around the online delivery of food and beverages are currently experiencing their golden hours: From meal-kit delivery over frozen food to food saving – online is booming in the groceries sector. No wonder that investors are keeping track of the development with eagerness. Investments in online grocery delivery have never been higher:

The first pandemic year 2020 proved that consumers worldwide are finally prepared to shop for their everyday essentials online. Still, the overall economic slump in the first stage of the pandemic brought many plans to found businesses to a halt. This is why – similar to other economic sectors – the first quarter of 2020 saw a collapse in venture capital investment also in the area of online grocery delivery compared to the preceding quarters. Worldwide investments in online grocery delivery start-ups were as low as US$0.2 billion in Q1 2020, which was the lowest level since mid-2017. The quarters 2 to 4 in 2020 then already brought along a remarkable investment increase, reaching their 2020 high in Q3, with a total of US$2.8 billion invested in online grocery delivery start-ups. The real peak phase of venture capital investment in online grocery delivery, however, did not start before the turn of the year. Q1 2021 saw an unprecedented and overwhelming US$7.7 billion of global investments in online food delivery, which corresponds to a stunning 312% increase compared to Q4 2020. When looking at the development since 2017, investment amounts in online grocery delivery have been fluctuating over the quarters, but generally been on an upward trend. Q1 2021 was definitely a peak, but there are currently no signs that the general increase in investments is likely to stop.

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December 2021

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