By Agroempresario.com

As the world adapted to post-pandemic life, the eGrocery sector, which witnessed an unprecedented boom during the Covid-19 lockdowns, now faces a significant downturn. In 2021, funding for eGrocery startups soared to nearly $19 billion, capturing a substantial 35% share of the agrifoodtech industry, according to AgFunder data. This surge was part of a broader venture capital frenzy that elevated eGrocery startups globally.

From surge to slowdown

The pandemic era saw eGrocery services become indispensable, but with the return to regular routines, the sector’s dynamics are shifting. Despite an ongoing demand for rapid and convenient grocery delivery, the funding landscape has dramatically changed. In 2024, eGrocery investment has plummeted to just $1.7 billion, representing a 90% decline from its peak. This marks a stark contrast to the $18.8 billion raised in 2021.

Future of eGrocery

The appetite for eGrocery services remains strong, with expectations that online grocery and meal delivery will continue to grow. A 2024 McKinsey report projects a combined annual growth rate of 16% for online grocery and meal delivery from 2023 to 2030, far outpacing the 2% growth forecast for offline groceries. Yet, the sector is navigating through fierce competition, high operational costs, and thin margins, leading to several high-profile failures, such as Getir’s exits from the UK and US.

Funding trends and market shifts

The total eGrocery funding over the past decade stands at $47.9 billion, with emerging markets and Europe leading the charge in 2024. India dominates with $1.1 billion in funding across 11 deals, driven significantly by Zepto, which alone raised $1 billion through two substantial rounds. The Netherlands and Germany follow with notable investments, while the US trails with $54.6 million from six deals. Notably, seed-stage funding has sharply declined, with just 14 deals in 2024 compared to 88 in 2023.

Technological innovations

Although eGrocery investments are dwindling, the sector's evolution is intertwined with advancements in related technologies. Innovations such as automated warehouses, delivery robots, and AI-driven inventory management are being developed to enhance efficiency not only in eGrocery but across the entire food supply chain. These technologies are expected to drive growth and transformation beyond traditional eGrocery startups.

Decade of eGrocery investment

Over the past ten years, China led with $14.1 billion in eGrocery funding, but this has dwindled to almost zero in 2024. The US follows with $12.1 billion, and India ranks third with $6.5 billion. European countries like Germany and Turkey also made significant contributions, with Germany investing $3.6 billion and Turkey $1.8 billion.

Top deals of 2024

• Zepto: India's rapid delivery service raised $1 billion in two rounds this year, bringing its total to $1.6 billion and a valuation of over $5 billion.

• Picnic: The Netherlands-based company secured $388.1 million, bringing its total funding to $1.5 billion.

• Flink Food: Berlin’s Flink raised $106.7 million, totaling $1.3 billion in funding, and operates in multiple European countries.

• La Fourche: The French startup raised $26 million for its affordable organic products platform, totaling $38.1 million.

• Rozana: India's rural e-commerce platform secured $22.5 million, expanding its reach across 14 districts.

The eGrocery sector, though facing a funding downturn, continues to adapt and innovate. The focus is shifting towards technological advancements and market consolidation, potentially setting the stage for a new phase of growth driven by efficiency and broader food supply chain improvements.