Since the Covid-19 lockdown in Spain began in March, more people have been shopping online. An April survey by the Capgemini Research Institute forecasts 37% of Spanish consumers will be shopping online over the next six to nine months, compared with 25% before the pandemic. The survey of 11,000 consumers in 11 countries, including Spain, also revealed that discerning consumers will be much more demanding about the environmental impact of home deliveries.
For Revoolt, a Madrid-based startup offering supermarkets emission-free last-mile deliveries, such drastic change in shopping habits resulted in unprecedented success for its business. “We increased our operational volume by 30%”, said CEO and co-founder Ángel Sánchez in a recent interview with CompassList.
"The Covid-19 lockdown facilitated the digitalization of many businesses that were previously reluctant to do so,” he noted. For its clients, Revoolt built in record time an app to upload their online catalog and process orders online. Deliveries were also facilitated at the clients’ preferred time slots.
"We removed important bottlenecks that were unnecessarily slowing down processes,” said Sánchez. The startup is now working on integrating its new technological solutions into its product offerings.
Revoolt has pioneered emission-free intra-urban deliveries since 2016. This, said Sánchez, was at a time “when almost no one was believing in it.” Today, the startup, is integrating a cloud-based SaaS with a fleet of electric vehicles operating across Madrid, Barcelona, Victoria, Zaragoza and Logroño. Its main clients are supermarkets Alcampo and Simply, both units of French retail group Auchan in Spain, and Campofrio, the Spanish processed meats multinational.
“We had to optimize most of our processes to be more efficient and responsive,” said Sánchez
One week to reinvent
“The pandemic also accelerated many of our pending tasks,” said Sánchez, who acknowledged that the operational parts were the biggest challenge. Everything, from measures to ensure zero-contact between customers and delivery drivers to the onboarding of new personnel, is now fully digitalized. “We had to reinvent everything in just a week," he added.
According to Sánchez, people staying home during the lockdown also meant that the company was able to process orders and make deliveries evenly throughout a day, without any excessive peaks at certain times. As such, the company only needed to increase its staff count by 10% to cope with a 30% rise in orders.
Sánchez is confident that in the post-Covid phase, online shopping channels will continue to play a crucial role in people’s shopping habits. But for customers to perceive significant added value in their overall shopping experience, hypermarkets, small shops, e-commerce and big logistic players have to join forces “to reinforce digitalization and process automation to optimize intra-urban operations in the future,” he noted.
Revoolt is now aiming to grow internationally through a franchising model to be launched in September. The company is planning on up to five franchises by the end of 2020 and 18 more in 2021. European cities with high population densities like Paris, Lyon, and Milan are in Revoolt's sight.
“Covid-19 boosted our expansion plans and made it even more ambitious,” said Sánchez, who is aiming for a 130–150% growth by the end of this year.
Raising new financing
Domestically, Revoolt recently launched new operations in Barcelona. It is also looking to expand to Valencia, Malaga and Seville by the end of October. The company is betting on post-pandemic trends that are likely to favor the localization of business and marketplaces, which aligns with its sustainability philosophy.
"Many governments today are pushing for the sustainability of the sector and this is a competitive advantage for us,” said Sánchez. In the past 12 months, the company saved 12.69 tons of CO2 emissions in its deliveries.
In January this year, Revoolt won a place in Lanzadera’s acceleration program, an initiative financed by Juan Roig, CEO and biggest shareholder of Mercadona, Spain’s largest supermarket chain. The tycoon recently announced that he was increasing his financing for Lanzadera from €2m last year to €10m, to extend support for Spanish startups, which are facing particular tough times given the current recession resulting from the Covid-19 pandemic. The Lanzadera project will also be expanded, including the creation of a scale-up program for established startups that have recurring monthly sales of at least €120,000 for the last six straight months.
Sánchez said Revoolt is in the midst of raising new funding. He has been following up with various funds, including those linked to Lanzadera, and 15K Angels, which had participated in an earlier funding round for Revoolt together with other private investors.
“If we manage to close the round with them, Lanzadera would be a perfect partner for us, not only because of its link to Mercadona, which would be a potential client, but also because of their philosophy,” he said.
“The investment concept of Lanzadera and the seed funds they work with is totally different from the way VC investors usually think, which is to exert pressure and push for 15%, 20% equity conversion… Theirs is more in line with the thinking of Juan Roig: it’s about accelerating companies and helping them; [as in] it would be great to get returns, but the entrepreneur needs to be left alone to check his own timing.”
Sánchez aims to close the funding round in July. Monies raised will be spent on its tech and market expansion, and to optimize Revoolt’s local delivery infrastructure.
“We are at breakeven, though without operating profit. Our model is already sustainable, so we are not in hurry,” he said, adding that the company’s recent ICO is also helping. "Our priority is to find a partner that can support us throughout our journey.”
