French meals supply startup Epicery will stop operations Tuesday, after one final vacation season hurrah for its purchasers and the native meals companies that have been utilizing the platform throughout its 9 years in enterprise in alternate for a 25% fee.
In a message saying the choice to prospects earlier this month, Epicery’s staff stated that it was “the results of the financial and monetary challenges now we have been dealing with for a number of months, and which, regardless of our greatest efforts, now we have been unable to beat.”
With a concentrate on 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, nonetheless, the startup reached sudden highs when France went into lockdown in the course of the COVID-19 pandemic. It was nonetheless driving 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 consumer. However in latest months, La Poste minimize ties with a number of startups it beforehand invested in, and particularly, offered Stuart at a major loss.
In a press release shared with TechCrunch, Geopost acknowledged 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 retailers, and powerful competitors within the catering phase.”
Meals supply in France in 2024 regarded vastly completely different in comparison with Epicery’s first years (it launched in 2016). On the time, its opponents included Take Eat Simple, which ceased operations in 2016, however Deliveroo and Uber Eats have been nowhere in sight, and fast commerce hadn’t gone by means of its rise and fall. Whereas Cajoo, Flink, Gopuff, and Gorillas not function in France, their advertising presence was exhausting to flee for fairly some time.
As compared, Epicery’s scale and visibility have been at all times modest. It had some 25,000 recurring prospects, shopping for from some 1,100 native retailers, largely in Paris and Lyon after it scaled again on its nationwide growth. This might have made sense as a standalone, life-style 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 points attributable to a non-disclosure settlement. In a private assertion, nonetheless, 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 energetic within the meals sector, saying he’s presently engaged on “an bold new mannequin that may allow the meals business 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 an ideal match, mission-wise and economically. Not solely is Pourdebon a heavy consumer of Geopost’s meals supply service Chronofresh, however it’s also on observe to achieve profitability in 2027, and can probably work on reaching that milestone earlier.
Epicery didn’t handle to make the mathematics work on the profitability entrance, nevertheless it typically introduced as much as 10% and even 20% in gross sales to native retailers it labored with. In line with Elsa Hermal, who co-founded Epicery with Morhange and VC Marc Menasé earlier than leaving operations in 2019, this was an important milestone.
“What’s great, and what’s crucial 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 turn out to be an necessary a part of their enterprise,” stated Hermal, who’s now a enterprise coach and impression investor, additionally by means of local weather fund Satgana.
As an investor, Hermal is aware of that Epicery was working in a fancy 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 may well’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 shocking to see an Epicery-like mannequin make a comeback in some unspecified time in the future.
