Finnish food delivery service Wolt has made its way into the grocery and retail markets, establishing itself as Amazon’s newest competitor.
Recently, the company made news after it raised $530 million to try and take on Amazon and to enable better e-commerce for local restaurants.
But what exactly is Wolt and why did it gain so much growth so quickly, and why is it trying to take on Amazon in the first place?
Miki Kuusi founded Wolt in 2014 and launched the app in 2015. Kuusi told CNBC that the company’s mission focuses on enabling local restaurants and other brick and mortar operators to have the tools at their disposal to provide a better e-commerce experience to their local customers than what their massive overseas competitors are able to do today.
When the application first took off, it had around 10 restaurants and just a few downloads. About a year later in 2016, the app reached 100,000 users and offered a total of 450 restaurants.
As of today, Wolt consists of over 10 million users; in addition, the company claims that it has 27,000 restaurants and retail partners available on the app, 50,000 couriers and 2,000 employees.
ICONIQ Capital led the $530 million funding round for Wolt, but this is not the firm’s first go-round with the company. In 2019, Wolt landed a $130 million investment, which was also led by ICONIQ Capital; this allowed Wolt to increase its expansion throughout Europe and fund hiring 1,000 employees.
The firm handles money for several Silicon Valley entrepreneurs like Facebook’s Mark Zuckerberg. It also invests in other companies such as Airbnb, Uber, Zoom and Alibaba.
Wolt and Amazon
Now to answer the question brought up at the beginning: Why is Wolt trying to take on Amazon?
Amazon has established itself within 17 countries, including the United States. They have yet to do so with Europe or larger parts of Asia but last October, Amazon launched its first Nordic store in Sweden (Amazon.se). For other Europeans countries, they still have to turn to the U.K. Amazon store if they want to purchase anything.
Wolt, on the other hand, is available in 23 countries, so it has a wider range than Amazon within Europe. That does not seem to be stopping Amazon from entering the food delivery market.
After acquiring Whole Foods in the U.S., Amazon began offering grocery delivery options through their app that allows you to order directly from a Whole Foods market near you. Additionally, if you live in the U.K., you can order groceries from markets such as Morrisons and Booths.
The same year that ICONIQ Capitol invested in Wolt, Amazon invested $575 million in Deliveroo. The U.K food delivery service also focuses on restaurants, but has since started delivering groceries with the Coronavirus pandemic still in play.
Kuusi did tell Bloomberg in 2019 that Wolt and Deliveroo do not overlap in any market, but he was not afraid of better-funded competitors.
He said, “If you have the right product and the right technology, it’s not about how much money every player has.”
