- Flink is a German on-demand food delivery service founded by Oliver Merkel, Julian Dames, and Christoph Cordes in 2020. Though the company is a relative newcomer, it has grown quickly since being launched.
- Flink makes money by selling marked-up grocery items which it purchases in bulk. The company partnered with supermarket giant REWE and operates smaller warehouses to boost its margins.
- Flink charges a delivery fee on orders with an attractive minimum order amount. The company is also charged an interchange fee by card issuers which it passes on to the consumer.
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Flink origin story
Flink is a German on-demand food delivery service founded by Oliver Merkel, Julian Dames, and Christoph Cordes in 2020. Flink is a relative newcomer to the food delivery industry and is one of many similar companies looking to profit from the vertical approach of operating dark stores.
Each of the three co-founders has an impressive resume and extensive industry experience. Merkel was a former Bain & Company partner who led the firm’s German retail operations. Cordes was the CEO of the online shopping company home24, while Dames held senior positions at Foodora, Delivery Hero, and Foodpanda.
The impetus for the founding of Flink was perhaps provided by Merkel, who had previously made a significant investment in Gorillas – another German food delivery company promising to deliver food in ten minutes. If nothing else, this gave the co-founder access to important business data around industry profitability and margins.
Like Gorillas, Flink is pitching itself as a grocery solution delivering fresh food items on-demand. Delivering these items as consumers require them is logistically challenging, especially when compared to longer-life items such as beer, cigarettes, chocolate, and other snack foods. Despite the logistical issues, however, the Flink co-founders believed instant shopping would become the new standard for perishable grocery items. Consumers, they argue, eat three meals per day with many shopping multiple times per week – representing a potentially lucrative market where consumers make repeat orders.
After acquiring rival service Pickery, the company was operational in five German cities by February 2021. A successful round of funding then enabled Flink to expand into the Netherlands and France at a rapid pace. Less than twelve months after it was launched, Flink became the fastest German company to reach unicorn status.
In September 2021, Flink announced another round of funding from DoorDash for several hundred million dollars. Recent estimates value the company at $2.1 billion.
Flink revenue generation
Flink earns money by selling grocery items on its platform and via delivery fees on customer orders.
Grocery sales
The company earns money on grocery sales by purchasing items in bulk and selling individual products for a higher price than can be found in traditional supermarkets.
Flink partnered with REWE in June 2021, with the supermarket giant becoming the exclusive supplier of the start-up. As part of the deal, it is likely Flink receives favorable rates for bulk purchases.
Margins are also boosted by the company operating small, optimized warehouses in lower-income areas where operating costs are lower.
Delivery fees
Flink also charges a delivery fee over and above the total purchase amount.
In Germany, the delivery fee is €1.80 with a minimum order amount of just €1. These fees are very attractive to consumers buying perishable items who need to make smaller, more frequent purchases.
Flink also charges transaction fees to offset the cost of the interchange fees charged by card issuers such as Mastercard and Visa.
Business Models Connected To Flink
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