French meals supply startup Epicery will stop operations Tuesday, after one final vacation season hurrah for its shoppers and the native meals companies that have been utilizing the platform throughout its 9 years in enterprise in change for a 25% fee.
In a message asserting the choice to clients earlier this month, Epicery’s crew mentioned that it was “the results of the financial and monetary challenges we now have been going through 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 clients rethink their meals spending. Even after ceasing operations in some cities, it had a unfavorable Ebitda of -€4.69 million in 2023, on gross sales of €2.57 million.
Before these difficulties, nevertheless, the startup reached sudden highs when France went into lockdown through the COVID-19 pandemic. It was nonetheless driving that wave in late 2021 when Geopost/DPDgroup, the categorical 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. But 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 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.”
Food supply in France in 2024 seemed vastly totally different in comparison with Epicery’s first years (it launched in 2016). At the time, its rivals included Take Eat Easy, which ceased operations in 2016, however Deliveroo and Uber Eats have been nowhere in sight, and fast commerce hadn’t gone by way of its rise and fall. While Cajoo, Flink, Gopuff, and Gorillas not function in France, their advertising presence was laborious to flee for fairly some time.
In comparability, Epicery’s scale and visibility have been all the time 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 growth. This may 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 big 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 elements because of 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 energetic within the meals sector, saying he’s presently 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 can be 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 an important match, mission-wise and economically. Not solely is Pourdebon a heavy person of Geopost’s meals supply service Chronofresh, however additionally it is on monitor to succeed in profitability in 2027, and can doubtless work on reaching that milestone earlier.
Epicery didn’t handle to make the maths 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. According 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 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 attain, has now turn into an necessary a part of their enterprise,” mentioned Hermal, who’s now a enterprise coach and impression investor, additionally by way of local weather fund Satgana.
As an investor, Hermal is aware of that Epicery was working in a posh area of interest however doesn’t assume it’s a no-go. “Logistics companies are difficult and difficult when it comes to metrics, however that doesn’t imply it could’t be achieved.” 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 sooner or later.
