Same-day grocery platform’s investor list reads like a who’s who of the FMCG industry.
Buymie has closed a new seed funding round, bringing the total amount invested in the on-demand grocery platform to more than €1m.
Buymie’s shareholder list is a relative who’s who of industry leaders, with the likes of retail industry veteran and Dragons’ Den star Eamonn Quinn stepping into the role of chair as well as backing from fast-moving consumer goods (FMCG) giant Unilever Plc and the former CEO of Morrisons.com, Scott Weavers-Wright.
‘The grocery industry has been shaken to its core, and disruption is well and truly underway’
– DEVAN HUGHES
Buymie, a previous Siliconrepublic.com Start-up of the Week, was early to the market in 2016 having recognised the changing tides for grocery e-commerce.
With a background in commodity markets and digital platform design, co-founder and CEO Devan Hughes has also recently taken on the role of chair of Sharing Economy Ireland, the industry association representing Airbnb, GoCar, UrbanVolt, Deliveroo, Uber and many others.
Grocery market correction
“We started working on Buymie in 2014 because we recognised that consumer demand for online was only going to continue to surge, but the traditional delivery infrastructure was completely dysfunctional in nature, losing €300m annually. Ultimately, we felt there had to be a correction on the way,” Hughes explained.
“Within a year of launching Buymie, the grocery industry saw a catalyst event occur with the $13bn acquisition of US grocery retailer Whole Foods by Amazon.
“Since then, the grocery industry has been shaken to its core, and disruption is well and truly underway.”
Former deputy chair of Superquinn (which was sold in 2005), Quinn was one of the first executives to introduce online grocery to Ireland back in 2001.
He recalled how the challenges facing grocery retail have only intensified in the last 17 years.
“When you look at online grocery operations of the big retailers today, nothing has really changed from a technology and cost standpoint since 2001. They still need to buy expensive vans and maintain out-of-date legacy systems. Not to mention that in recent years, companies like Deliveroo, Mytaxi, Uber and Just Eat have radically transformed the expectations of consumers, where next-day delivery just isn’t good enough – especially where the likes of Amazon and Buymie can do the same job in one hour.”
Having sold his e-commerce platform for more than £70m in 2013, Weavers-Wright shares his fellow investor’s opinion. “The challenge retailers have today is that when it comes to grocery online, they just can’t make money due to last-mile costs.
“The benefit of Buymie is that it sits above the market; it doesn’t belong to any one retailer but allows them to use the power of cutting-edge platform and data technology to deliver goods faster and cheaper using a shared network.”
Dessie Boyd, strategy director for Unilever Ireland, said that changing consumer behaviour was a key reason for participating in the seed round in Buymie.
“Understanding consumer behaviour is a key benefit of Unilever’s global scale – with that, we’ve observed a macro-trend in which consumers are engaging and interacting with brands in new and exciting ways.
“This consumer disruption has given rise to whole new channels in which players like Airbnb and Uber, through the use of similar platform technology, have radically transformed their respective industries.
“This is an incredibly dynamic period for FMCG and we are excited to announce this partnership with Buymie, which allows us to align our brands with these rapidly evolving expectations.”
Looking to the future, Hughes said he anticipates another year of surprises for the FMCG industry.
“In the past six months alone, the industry has seen a wave of large global strategic moves by retail, with Walmart investing $17bn to acquire Flipkart, Target acquiring US-based on-demand grocery platform Shipt for $550m and Carrefour linking up with Google. The reality is that with this new pace of change faced by the industry, we are in for plenty more surprises.”