LONDON — British Formula One driver Lewis Hamilton has backed rapid grocery delivery start-up Zapp as part of a larger $200 million investment in the company.
The London-based firm said Friday it raised the fresh cash in a Series B funding round led by venture capital firms Lightspeed Venture Partners, 468 Capital and BroadLight Capital. Existing investors Atomico, Burda and Vorwerk Ventures also took part.
Zapp did not disclose its valuation, and declined to comment on the size of Hamilton’s stake.
The involvement from Hamilton marks a rare start-up investment from the F1 racing star. The Mercedes team driver has won seven World Drivers’ Championship titles, holding a joint record with retired German driver Michael Schumacher.
Founded in 2020, Zapp’s service lets people buy snacks, drinks and essential items from so-called “dark stores,” small warehouses built with the sole purpose of preparing online delivery orders. The app promises delivery times of as little as 20 minutes.
Zapp is one of many upstart retailers in Europe competing for shoppers’ wallets with the promise of superfast delivery. It’s competing against some well-funded rivals, including the Turkish company Getir and German firms Gorillas and Flink.
Zapp claims it’s different to competitors as its app offers a digital alternative to the convenience store, rather than an online version of a supermarket like Tesco or Sainsbury’s. The company currently operates in seven cities including London, Amsterdam and Paris.
“With this new capital we will focus on achieving profitability in our existing markets as well as bringing Zapp to new customers globally,” Zapp co-founder Joe Falter said in a statement.
The company said it also plans to spend the new capital on improving its customer experience and supply chain. Last year, Zapp opened a 25,000 square foot distribution center in London to keep goods flowing to its dark stores.
JPMorgan acted as financial advisor to Zapp on the deal, the company said.
Rapid delivery firms have experienced equally rapid growth since the onset of the coronavirus pandemic. Getir was most recently valued by investors at $7.7 billion, while Gorillas scored a $1 billion financing round led by German food delivery firm Delivery Hero, which valued it at over $3 billion. Meanwhile, DoorDash led a $750 million investment in Berlin start-up Flink.
As the space has become more crowded, there have been increasing signs of consolidation, with Getir buying London start-up Weezy and Gorillas snapping up French rival Frichti.
Tech investors and executives are starting to question the long-term sustainability of such start-ups. Tim Steiner, the CEO of retail tech firm Ocado, said Wednesday that he sees “little differentiation between all the players out there,” and is unsurprised to see consolidation in the market.
“We don’t see it as a winner takes all market,” Steve O’Hear, Zapp’s vice president of strategy, told CNBC. “Just like the wider grocery market, there is room for different players and historically customers have demonstrated that they value choice.”