SoftBank, Prosus bankroll expansion of Norwegian grocer

Oslo

SOFTBANK Group Corp's Vision Fund 2 is joining technology investor Prosus in bankrolling the expansion of Oda, Norway's largest online grocery business, valuing the business at roughly 750 million euros (S$1.19 billion).

The two investors are forking out about 100 million euros each, and existing owners Kinnevik and supermarket chain Rema are paying out 20 million euros and three million euros, respectively.

The combined 223 million euros will be used to finance an expansion to Finland and Germany, where the online grocery markets remain relatively untapped, Oda said on Thursday.

"Online grocery is a much greater game-changer than people have realised," Karl Munthe-Kaas, chief executive officer (CEO) and co-founder, said. "What we have discovered and developed is technology and automation that is fairly capex effective, but still considerably more efficient than physical grocery stores."

Oda says its strengths include a personalised shopping experience and highly automated fulfillment, with three times better efficiency than store picking.

It plans to launch in Finland in the fourth quarter, aiming to reach about 70 per cent of the population from Helsinki. It is currently building a fulfillment centre to provide same-and-next-day grocery home deliveries. The expansion in Germany will take place next year with "all major cities" under consideration, the CEO said.

"The reason why Finland and Germany have fairly low online penetration is completely related to the (lack of) supply," he added. "Our thinking is that someone needs to come in and build new infrastructure."

The company generated roughly 200 million euros in revenue last year, with a "small" loss. This year, it has had positive earnings before interest, tax, depreciation and amortisation each month. The investment comes on top of about 100 million euros raised previously.

As part of the deal, Neil Cunha-Gomes, investor at SoftBank Investment Advisers, and Roger Rabalais, chief financial officer Food Delivery at Prosus Group, will join Oda's board. The investment round was managed by Carnegie.

The company is rebranding from Kolonial.no, which referred to an older name for a corner shop in Norwegian. BLOOMBERG