By Michael Kahn
PRAGUE (Reuters) -With European consumers still cautious, Prague-based online grocer Rohlik Group is bolstering its profit by offering services to other retailers and selling advertising space to food brands as it considers a possible initial public offering, Rohlik founder and chief executive Tomas Cupr told Reuters in an interview.
The privately held company, valued at nearly $2 billion in November, is selling e-commerce, logistics and delivery services through its new platform Veloq, targeting grocers who want to start selling online.
Veloq could boast a profit margin of 50-60%, well above the 20-30% the company’s core online delivery business generates, Cupr said.
A 2021 funding round made Rohlik a rare Czech “unicorn,” or a startup with a valuation of more than $1 billion. Cupr said the company is considering tapping new funding from either an initial public offering or private investors early next year.
“There are two scenarios,” he said. “We either do this early IPO round and we accelerate our growth and an IPO makes sense. Or we don’t raise and we build on the foundations and in three years this will be a company making a lot of money – at the scale we hoped for initially – but the foundations will be there for a public investor to be interested.”
The online grocer, which offers customers one-hour delivery of a wide range of locally sourced products, operates in the Czech Republic under the Rohlik moniker and in Germany under Knuspr.de, as well as in Hungary, Austria and Romania under different brands.
Rohlik is expanding its retail media business – selling advertising space to food brands – as another key growth-driver. With close to 100 clients so far, its target revenue is between 3 million euros and 5 million euros ($3.51 million and $5.85 million) by the end of fiscal-year 2025, Cupr said.
Retailers including Carrefour and Tesco are investing heavily in retail media as an alternative profit-driver. Consultancy OC&C predicts fivefold growth in Europe’s retail media market, with ad sales increasing to more than 30 billion euros ($35.12 billion) by 2028, compared with around 6 billion euros ($7.02 billion) in 2020.
Overall, Cupr said he expects Rohlik’s revenue to increase by 35% in 2025, to around 1.43 billion euros. Rohlik has managed to win over new customers in a region where shopping online for groceries is still not the norm, despite an economic slowdown in Germany and other markets.
Cupr said a wave of bankruptcies in Germany has created opportunities for further acquisitions, after Rohlik bought German baby food manufacturer Topfer last year.
“There are opportunities like that throughout Germany,” Cupr said. “We are not looking to vertically integrate and we don’t have the scale to purchase large manufacturing companies, but food producers alongside Rohlik are super-interesting.”
($1 = 0.8542 euro)
(Reporting by Michael Kahn, Editing by Helen Reid and Matthew Lewis)
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