Finnish Food Delivery App Wolt to Hire 1,000 After New Funding

(Bloomberg) -- Wolt Enterprises Oy, a food delivery startup based in Helsinki, Finland, has landed $130 million in new investment to increase its European expansion and fund a hiring spree.

The investment was led by Iconiq Capital, a firm that manages money for well-known Silicon Valley entrepreneurs, including Facebook Inc. founder Mark Zuckerberg. Highland Europe, a London-based venture capital fund, EQT Ventures, the venture capital arm of Swedish private equity group EQT and Helsinki-based Lifeline Ventures also invested, the company said in a statement.

An earlier $30 million investment round led by Israeli venture capital firm 83North closed in January 2018. The valuation terms of the funding rounds were not disclosed.

Wolt will use its new funding to accelerate its growth, adding new cities and countries, Miki Kuusi, Wolt’s 29-year-old co-founder and chief executive officer, said in an interview. He also said the company would invest "heavily" in marketing and new customer acquisitions, and would hire an additional 1,000 individuals in the next 18 months. It currently employs about 450 people.

The startup, which was founded in Helsinki in 2014, delivers food in 50 cities across 15 European countries, primarily in a corridor running south from Helsinki through Tallinn, Estonia to Prague and Athens and then to Tel Aviv.

While larger food delivery services Deliveroo and Uber Technologies Inc.’s Uber Eats have largely concentrated on cities with populations well above 1 million people, Wolt has gone after smaller markets where population density is lower.

With fewer orders per hour and longer distances for couriers to cover, it’s harder to make the unit economics of food delivery work in these less dense areas. Kuusi said that Wolt had used machine learning algorithms that predict order flow and optimize courier’s routes.

Wolt can enter a small city, with 30,000 to 40,000 people, and reach a break even or cash flow positive state within weeks of launching, Kuusi said. "Then when we go to a big city, this is a lot easier because we get so much more volume and our optimization is so much more efficient," he said.

Deliveroo, which has raised $1.5 billion to date including a recent $575 million investment round led by Amazon.com Inc., also announced last week that it plans to expand into the U.K.’s suburbs and smaller towns this year, with the goal serving 50% of the British population, up from just a third of it currently.

So far, Wolt and Deliveroo do not overlap in any market, Kuusi said, adding he was not afraid of better-funded competitors. "If you have the right product and the right technology, it’s not about how much money every player has," he said.

Johan Svanstrom, a partner with EQT Ventures, said Wolt is well-positioned to play a role -- either as an acquirer or a target -- in a wave of consolidation that he predicts will begin to sweep the food delivery sector. "Any time there are consolidation games going on you want to have a seat at the table, and Wolt does," he said.

To contact the reporter on this story: Jeremy Kahn in London at jkahn21@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nate Lanxon

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