Photo by Brett Jordan on Unsplash

According to a report published last year, the global same-day delivery market was expected to grow 21% annually to reach $20.36 billion by 2027. Several companies are trying to address the instant delivery requirements by setting up of micro fulfillment centers. But sustaining a profitable, and attractive business model is appearing to be a challenge.

Jokr’s Offerings

Founded by Foodpanda Founder Ralf Wenzel, New York-based Jokr offers a frictionless shopping experience that provides delivery to its customers within minutes of purchase. Today most consumers want their products to be delivered as soon as possible. Amazon Same Day Delivery has been offering that service for a few years now. In 2021, Jokr ventured into the market with an approach centered around what micro-hubs do. Micro-hubs are storefronts that operate on side streets of denser areas.

Jokr relies extensively on data analytics to forecast what customers will want, when, and where, to organize these micro-fulfillment centers. Advanced analytics is able to help it determine what goods the customers will need, which day, which week, which month, and even what time, to build a dynamic inventory and catalog management system. It is able to rotate inventory and provide inventory and pre-forecast suggestions for customers using these advanced analytics. And, to keep costs minimum, it procures the goods sold on the app directly from brands, manufacturers, and wholesalers. Jokr’s end users do not have a minimum order requirement or delivery fees.

Besides offering grocery and local favorites, the company is planning to expand its offerings to the alcohol delivery space by offering local beer and wine delivery and venturing into an ad network. Jokr Media offers a range of marketing placements and solutions, including in-app banners, sponsorships, and sampling. It will be launching an auction-based self-service ads platform, that will allow brands to select auto-bidding or place bids and manage campaigns themselves. Clearly, Jokr is looking at ways to diversify revenues and monetize its data base.

As of 2021, Jokr operates 200 hubs globally and delivers products in over 15 cities. The company was looking to continue to scale its operations this year. Jokr is not the only player in the space though. It shares the market with bigger players like InstantCart and other smaller competitors like Gopuff, Getir, and FastAF.

But the current year has been troublesome. Rising prices and concerns about the economy have worried the market. Earlier this week, Jokr announced that it was going to shut down operations in the US and, instead, focus on its Latin American market. Jokr will end delivery operations in Boston and New York, shutter its nine micro-fulfillment centers in the country, and also look at other restructuring options to manage its financials. The Latin America region accounts for 90% of its revenues. Jokr plans to improve its AI-powered app to deliver better product personalization in the market.

Jokr wasn’t the only instant delivery service to close operations. Recently, Fridge No More and Byuk had announced plans to shutter their American operations.

Jokr’s Financials

Jokr does not disclose its detailed financials. Last July, it had reported revenues of $1.7 million and a loss of $13.6 million. Despite the small revenue and high losses, the company did manage to attain a Unicorn status last year.

It has raised $430 million, and announced its most recent round of funding in July 2021 where it raised $170 million at a valuation of $1.2 billion. Investors in the round included Tiger Global, Activant Capital, Balderton Capital and HV Capital, among others. It will be interesting to see how Jokr’s valuation fares under the current market conditions.

Its rivals are having a tough time. Buyk, the US subsidiary of a Russian grocery delivery service, declared bankruptcy in March, soon after the Russian invasion of Ukraine. Fridge No More shuttered operations after a potential deal with DoorDash fell through. GoPuff, which had reached a $15 billion valuation last July, laid off 3% of its staff this year, and appears to have suspended its IPO plans for the year. The VCs are becoming wary of uncertain business models, and Jokr appears to be among the players to bear the brunt.

I wonder, how many Unicorns are going to become Unicorpses in the current downturn! SoftBank, one of the leading proponents of flushing companies with capital with no respect for fundamentals, is pulling back. I hope, Tiger’s lousy practices get similar rebuke from the market.