(Bloomberg) — Rapid grocery startup Jokr will roll out a media platform to sell targeted advertising, in a bid to boost sales and get closer to profitability at a time when food delivery companies are under pressure from investors to stem losses.
Jokr on Wednesday will launch an offering to allow advertisers to reach consumers both on the company’s mobile application and off-line through placements such as stickers on couriers’ bags or in deliveries, Chief Executive Officer Ralf Wenzel said in an interview. The company is following others in the sector such as Delivery Hero SE and Gopuff in looking to advertising as a new source of revenue.
The New York-based company will use its trove of customer purchase data to attract brands, whose enthusiasm for advertising on platforms like Meta Platforms Inc.’s Facebook is waning.
“If we can share with retailers what people are buying, then it gives a very targeted possibility to advertise,” Wenzel said. He expects advertising to eventually reach around 10% of the total value of transactions on Jokr.
The sales push comes as investors shift their attention to prospects for profit at startups instead of growth. Jokr is not profitable, and Wenzel declined to specify how much money it’s losing. He said the company should turn a profit in less than 10 years.
Latin America
Jokr, which generates about 90% of its sales across Brazil, Mexico, Colombia and Peru, last raised funding at a $1.2 billion valuation in December. Wenzel said he currently isn’t raising new financing and will evaluate future opportunities as they arise.
The company says its profit margin on products is 28% of revenue in Latin America, and aims to increase that to 40% by focusing more on local, fresh and directly sourced goods.
Wenzel said companies operating in the delivery and e-commerce space such as Amazon.com Inc. and Delivery Hero have seen their stocks drop too far given the large opportunity that exists to take consumers’ retail spending online.
“The industry got basically bashed to a certain extent in an unjustified way,” Wenzel added. “Those that can combine efficient growth, sustainability and scale will come out as absolutely fantastic companies.”
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