Voly raises $13M led by Sequoia to deliver instant groceries in Australia

The trend that is instant grocery delivery — online ordering of essentials with your purchases being delivered to you in under an hour — continues to proliferate across multiple markets, and in the latest development, Sequoia is leading an investment in one out of Australia.

Voly, a five-month-old Sydney-based startup that offers thousands of SKUs and promises deliveries in 15 minutes at a flat fee of A$2.99 ($2.14), has raised A$18 million (just under $13 million at today’s rates) in a seed round of funding that it will be using to expand its business to cities and towns across the country.

In addition to Sequoia, by way of Sequoia Capital India, other investors in the round include Global Founders Capital (GFC) and Artesian Capital, an Australian firm; the latter two also previously backed Voly in a $1 million pre-seed round.

At a time when the instant grocery market is very crowded in certain regions like Europe — where a number of local startups are coexisting and competing with some very heavily capitalised players with international ambitions like Gopuff, Gorillas, Flink and Getir — Voly has picked a ripe moment to ramp up in Australia.

The market for groceries in the country is estimated to be worth some A$90 billion ($64.6 billion) annually, but while there are some services for delivering so-called “big basket” purchases that are typically made weekly, the field appears to be pretty open for those offering deliveries in under an hour.

“Instant delivery is still very revolutionary here,” Mark Heath, the co-CEO and co-founder, said in an interview earlier.

“We were the country that got left behind by the other delivery startups,” joked Thibault Henry, the other founder and CEO. “We are a breath of fresh air.”

It currently offers some 2,000 SKUs and the plan is to grow that to 3,000, with groceries and essentials also complemented by modular shopping that mimics the concept of meal kits: A customer can select recipes based on preparation time, and then buy the ingredients needed to make them.

Heath said this has helped the company market itself not just to the younger, urban-dwelling millennials that typical are the early adopters of instant grocery services; but also working parents “who still want to cook tasty food for their families.” Henry believes the typical Voly user will use its service several times a week.

That lack of competition could be one reason investors have been bullish on Voly; the other might be the track record of the founders.

Heath helped launch Uber in Australia heading up operations and logistics, and then he worked as the country manager for CloudKitchens. Henry, meanwhile founded and ran a last-mile refrigerated delivery startup, Balto Logistics, which racked up a long list of on-demand food delivery brands as customers.

“Australia’s grocery market, which sees $90 billion in annual spends, is a large and profitable space that continues to be dominated by offline retail,” said Abheek Anand, MD, Sequoia India, in a statement. “The Sequoia Capital India team was impressed by the strong consumer love for VOLY, their compelling value proposition, and an impressive team of repeat founders that has blitzscaled businesses in Australia before. With on-demand models traditionally scaling very successfully in the country, the decision to lead their seed round and help them scale their business across Australia was an easy one to make.”

While Voly may be a very new and likely very small outfit — it’s not disclosing customer numbers but says that right now its growing at a rate of 100% each month — it’s indeed the collective experience and network that the two have that’s helping them build their platform and establish supply chains that don’t completely kill Voly on margins while still aiming to sell goods at retail, rather than marked-up, prices.

Another point of distinction in how Voly is growing is that it’s choosing to make its drivers full-time employees rather than contractors. “That’s our choice,” Heath said. “Uber and DoorDash are gig economy companies. We’ve chosen a different model.”