Oda, a Norwegian-based grocery delivery startup, has raised $151 million (NOK1.5 billion) in funding despite the tough market condition.
During the peak of the COVID-19 pandemic, people needed a service to deliver groceries right to their doors due to limited mobility. As one of the earliest players in the niche, Oda’s services soared in popularity at that time.
The post-pandemic situation, however, challenges the company’s development. Most parts of Europe are dealing with inflation due to global supply issues. Consumers are having difficulties affording their daily necessities due to decreased purchasing power. This, combined with the return of customers to physical stores, has reduced market shares for online grocery.
The situation affects the company’s valuation, which is now at $353 million, down from $900 million in April 2021. Despite the decline, managing director Kristin Thornes Woldsdal claimed that the business had posted 15 to 20 percent year-per-year growth in the past months after lowering its prices to match discounted stores. The startup has also reported that its Norwegian operation is still profitable.
Summa Equity and Verdane are among the investors participating in the capital raising. They provided the funds either in equity investment or equity through debt conversion. Co-founder and CEO Karl Munthe-Kaas explained the difference between this funding round and the previous ones.
We are seeing a very different market dynamic, where investors value short-term profitability
Karl Munthe-Kaas, CEO
“In this round, we are seeing a very different market dynamic, where investors value short-term profitability over long-term earnings, when making investment decisions,” Munthe-Kaas said.
The investors said they saw a growth opportunity for Oda. Summa Equity and Verdane believe Oda’s business model is profitable and sustainable. They praised Oda’s role in reducing carbon emissions, as online grocery shopping reportedly produces less pollution than traditional shopping.
With the fund, Oda plans to strengthen its presence in Finland and Germany, which it entered in 2021 and 2022, respectively. Once it achieves the goal, it will expand to other regions.
