Five years ago its first customer was a Lochee convenience shop. Now a Dundee tech business is being valued at £60 million.
Use of the Snappy Shopper app, which facilitates customers ordering from convenience stores, has rocketed during the pandemic.
Now former Sainsbury’s chief executive Justin King will join the company as it seeks to raise £12m.
Snappy Group – which includes Snappy Shopper and Hungrrr – is offering investment based on a valuation of between £60m and £65m.
The Snappy Shopper app allows customers to order groceries from their local convenience store with delivery from 30 minutes.
It was first adopted by a Mace in Lochee High Street in 2016. It now boasts more than 1,000 outlets, including Co-Op, Nisa and SPAR. The company takes a small percentage of the value of the basket.
Hungrrr offers hospitality businesses an affordable way to offer an app to take orders.
Again, demand rocketed as Covid-19 hit and restaurants looked to offer takeaway options. Hungrrr has also supplied apps for Brewdog and Subway.
Industry veteran makes ‘significant’ investment
Mr King was Sainsbury’s CEO between 2004 and 2014. Prior to this, the industry veteran was Marks & Spencer’s head of food.
He has made a “significant investment”. He is currently a senior adviser and will join the company as a non executive director after the fundraising round.
Mr King said: “I have been hugely impressed by the Snappy Group’s affordable solution, leadership team and rapid growth.
“The company is championing the needs of businesses in their local community.
“Its proprietary technology provides businesses with an affordable delivery solution which enables them to compete in this fast-changing market segment.
“This not only caters to the trend for top up shopping but also an increasing desire by consumers to access and support local enterprises.
“This is an exciting and pivotal time for the business and I believe that I will be able to add significant value.
“I look forward to working with the management team as the business continues its expansion and grows its market share further within the thriving UK convenience market and beyond.”
Plans for the new funding
The Series A fundraising round is to fund continue rapid expansion in the convenience and hospitality sectors.
Snappy Group’s customer base has grown by a multiple of five over the past two years.
In 2019 it had 220 customers compared to 1,150 today. The company said it was used by more than 700,000 consumers.
Its annualised gross merchandise volume approached £100m for the year ended March 2021.
Co-founder Mike Callachan said: “Prior to the pandemic, Snappy Group was already established in both hospitality and grocery home delivery.
“Lockdown accelerated the online trend, but we strongly believe the shift in consumer behaviour will persist in the long term.
“While we expect the rapid rate of growth in deliveries to slow slightly as lockdown eases through the summer months, the online market is a long way from maturation.
“Our mission is to give communities on demand access to the products of local businesses
“In this context, our platform is based on genuine partnerships and the principle of mutual benefit.
“We are very excited to have been able to attract Justin’s interest and investment.”
Participants in the Snappy Group’s initial seed rounds included Kelvin Capital, Scottish Enterprise and Mercia Asset Management.