The largest-ever round raised in Spain

Several media including TechCrunch, reported that Glovo picked up a Series F of $528mn (€450mn). Glovo is a startup out of Spain with 10 million users that delivers restaurant take-out, groceries and other items.

Glovo aims to become the market leader in the 20 markets in Europe including Spain, Poland, Italy and other countries. The company focuses on “q-commerce” service, which means items will be delivered to urban consumers in 30 minutes or less. It will be using the money to hire up to 200 more engineers, for example. The company has several offices for engineers in Europe such as its headquarters in Barcelona, Madrid and Warsaw, Poland.

In fact, this deal is a milestone funding round not for the company but its home country, Spain. This is because $528mn was the largest-ever round raised by a Spanish startup. Lugard Road Capital and Luxor Capital Group have led this funding. What’s more, Delivery Hero, Drake Enterprises and GP Bullhound also participated in it, and all are previous backers of Glovo.

Who is Glovo?

Glovo is a Spanish quick-commerce start-up and its head office is in Barcelona. It offers an on-demand courier service that purchases, picks up, and delivers products ordered through its mobile app.

According to its homepage, company’s vision is to give everyone easy access to anything in their city. As of April 13th, 2021, the Spanish startup offers its service more than 20 countries. In addition, it has more than 64K couriers, 7.4M active users and 71K local shops & restaurants.

How does Glovo work?

Glovo’s mobile application connects customers with independent local couriers, who acquire goods from any restaurant or shop in a city. Furthermore, they also deliver urgent packages for a variable fee. The mobile app allows users to find and place orders with their favorite restaurants which are picked up. Of course, users can know when orders are ready and will be delivered to their doorstep.

The platform’s features include geolocation, which allows customers to track their deliveries in real-time and locate the nearest glover (courier). Thanks to app’s optimization of speed and distance, the service looks like a new personal courier.

Are on-demand courier/driver companies sustainable?

This series F round seems to have some meanings. First of all, on-demand courier services soar up. For example, the UK on-demand courier company, Deliveroo, realized Initial Public Offering (IPO) in 2021. In fact, the English company also operates in Barcelona, the home city of Glovo. After the pandemic, more people across the globe stay at their home and have breakfast, lunch and dinner, too. It means that a lot of people in the world use, or sometimes must use on-demand courier services. Therefore, startups should take advantage of this opportunity to win the game called “winner takes all”.

On the other hand, there are some challenges that these companies face now. First, profitability is one issue. “Winner takes all” situation makes tech companies compete fiercely. The battle between Uber and Lyft, or the competition between Grab and Gojek is a good example. Of course, in Barcelona, Glovo competes with other companies including Deliveroo.

Second, how these companies treat couriers or drivers? Self-employed or not? For instance, the UK Supreme court has ruled that Uber must treat its drivers as workers rather than self-employed. Glovo also lost the legal battle in 2020. Supreme Court in Spain ruled against its classification of delivery couriers as “autonomous” (for example, self-employed).

Of course, on-demand courier services are totally new and the pandemic changed our society drastically, even rapidly. Therefore, we can say that this is the stage of development. We believe that we will find better solution make every stakeholder happier.