After landing and landing, food delivery startup Epicery is closing up shop

French food delivery startup Epiceria It will shut down on Tuesday after the last holiday season for its customers and local food businesses that used the platform during its nine-year run in return for a 25% commission.

In a message to customers announcing the decision earlier this month, the Epicery team said it was “a result of the economic and financial challenges we have faced for several months and, despite our best efforts, have been unable to overcome. “

Epicery, which focuses on premium groceries and local sourcing, suffered when inflation made customers rethink their grocery spending. Some cities had it even after it stopped working -€4.69m in negative Ebitda in 2023, €2.57m in sales.

However, before these challenges, the startup reached unexpected heights when France went into quarantine during the COVID-19 pandemic. It was still riding that wave in late 2021 when Geopost/DPDgroup, the express parcel delivery arm of Groupe La Poste, which runs France’s national postal service, took a majority stake in the company.

The corporate alliance made sense at the time: Geopost was also an investor in last-mile delivery service Stuart, of which Epicery was a heavy user. But in recent months, La Poste has cut ties with several startups previously investedand especially Stuart sold it hour significant loss.

In a statement shared with TechCrunch, Geopost said the decision was made “following an in-depth review of (Epicery’s) financial and operational performance” and that the resulting “severe impact on the subsidiary’s short- and medium-term profitability.” developments in the food delivery market, a gradual return to direct consumption from local stores after COVID, and strong competition in the catering segment.

Food delivery in France in 2024 looks very different compared to the early years of Epicery (launched in 2016). At the time, its competitors included Take Eat Easy It stopped working in 2016but Deliveroo and Uber Eats were nowhere to be seen and brisk trade hadn’t gone through the ups and downs. And Cajoo, Flink, Gopuff and Gorillas is no longer active in Francetheir marketing presence was hard to escape for a while.

Epiceri’s scale and visibility were always modest in comparison. It had about 25,000 repeat customers who, after scaling back its national expansion, shopped at about 1,100 local stores, mostly in Paris and Lyon. It might have made sense as a standalone, lifestyle business, but less so as a VC-backed one, and as part of a large group where numbers like that hardly move the needle, Stuart’s synergy in particular is gone.

Epicery co-founder and CEO Edouard Morhange could not comment on the strategic aspects of the undisclosed deal. But in a personal statement, he commented on Epiceri’s legacy. “I’m very proud to have introduced local retailers to e-commerce over the past 10 years and I’m sure they’ll continue to grow their digital sales in the years to come.”

Morhange will remain active in the food sector, saying it is currently working on an “ambitious new model that will allow the food industry to continue to digitize in France and abroad”. As for the Epicery employees, Geopost said each of them will “receive support from HR teams to discuss opportunities within the Group or help find work”.

Nicolas Machard, a French entrepreneur with a food market Pourdebon does is also a subsidiary of GeopostHe said he’s confident Epicery employees will take on new roles soon. He is also convinced that Geopost and Pourdebon are still a great fit, mission-wise and economically. Not only is Pourdebon a heavy user of Geopost’s food delivery service Chronofresh, but it is on track to reach profitability in 2027 and will likely look to reach that milestone sooner.

Epicery couldn’t make the math work on the profitability front, but it sometimes made 10% or even 20% on sales to the local stores it worked with. According to Elsa Hermal, who co-founded Epicery with Morhange and VC Marc Menasé before exiting operations in 2019, it was a very important milestone.

“What’s great, and what’s very important to me, is that what we promised (the store owners) from the beginning, and it took us a long time to achieve it, has now become an important part of their business,” Hermal said. now a business coach and impact investor Through the Satgana climate fund.

As an investor, Hermal knows that Epicery operates in a complicated niche, but he doesn’t think it’s impossible. “Logistics businesses are complex and difficult to scale, but it’s not impossible.” Now, local businesses have gotten a taste of it, and in a context where every sale counts, it wouldn’t be too surprising to see an Epicery-like model return someday.