French meals supply startup Epicery will stop operations Tuesday, after one final vacation season hurrah for its purchasers 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 saying the choice to clients earlier this month, Epicery’s crew mentioned that it was “the results of the financial and monetary challenges we’ve been going through for a number of months, and which, regardless of our greatest efforts, we’ve been unable to beat.”
With a deal with premium groceries and native deliveries, Epicery suffered when inflation made clients rethink their meals spending. Even after ceasing operations in some cities, it had a detrimental Ebitda of -€4.69 million in 2023, on gross sales of €2.57 million.
Earlier than these difficulties, nevertheless, the startup reached surprising 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 current months, La Poste lower ties with a number of startups it beforehand invested in, and particularly, bought Stuart at a big loss.
In an announcement 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 robust competitors within the catering section.”
Meals supply in France in 2024 appeared vastly completely different in comparison with Epicery’s first years (it launched in 2016). On the time, its opponents 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 by its rise and fall. Whereas Cajoo, Flink, Gopuff, and Gorillas now not function in France, their advertising and marketing presence was arduous to flee for fairly some time.
Compared, Epicery’s scale and visibility had been at all times modest. It had some 25,000 recurring clients, 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 features attributable to 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 the moment engaged on “an formidable new mannequin that can allow the meals trade to pursue its digitalization in France and overseas.” As for Epicery’s staff, Geopost mentioned that every of them will obtain “help from the HR groups to debate alternatives inside the Group or to assist them discover a job.”
French entrepreneur Nicolas Machard, whose meals market Pourdebon is additionally a subsidiary of Geopost, mentioned he’s assured that Epicery’s staff will quickly land new roles. He’s additionally assured that Geopost and Pourdebon are nonetheless a terrific 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 seemingly work on reaching that milestone earlier.
Epicery didn’t handle to make the mathematics work on the profitability entrance, but it surely generally introduced as much as 10% and even 20% in gross sales to native outlets it labored with. In accordance with 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 fantastic, 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 realize, has now develop into an essential a part of their enterprise,” mentioned Hermal, who’s now a enterprise coach and influence investor, additionally by local weather fund Satgana.
As an investor, Hermal is aware of that Epicery was working in a fancy area of interest however doesn’t assume it’s a no-go. “Logistics companies are difficult and difficult by way of metrics, however that doesn’t imply it could actually’t be finished.” Now that native companies have had a style of this, and in a context the place each sale counts, it wouldn’t be too stunning to see an Epicery-like mannequin make a comeback in some unspecified time in the future.
