Despite the difficult economic situation, Glovo courier delivery company continues to grow in Ukraine. In H1 2024, growth reached 23%, gradually approaching the 30% mark. The company has cooperated with more than 70,000 couriers and currently has 12,000 partners and more than 250 employees in its Ukrainian office.
In an interview for AIN.Capital, the founder of Glovo, Sacha Michaud, and the director of Glovo in Ukraine, Maryna Pavlyuk, talked about the results and successes of the service in Ukraine and the CEE countries, talked about the telemedicine service, volunteer initiatives, as well as cooperation with Ukrainian startups. In addition, they discussed the PowerUp conference, which took place on June 18 in Kyiv and was attended by Sacha and Maryna, and also shared their impressions of the winners of the Glovo Startup Lab startup competition.
In June 2023, in a previous interview for AIN, you said that the company reached pre-war numbers in March 2023, and in May 2023, the company already saw growth. What are the current business figures in Ukraine percentage-wise?
Maryna Pavlyuk:
The growth has reached 23%, and by now, taking the run rate of May, it’s closer to 30%. The development is clear, the industry is not stagnating.
We have around 12,000 partners and more than 250 employees in Ukraine. Also, millions of users. Over the past years, we paid more than €20 million of taxes. Although we are not sharing the daily number of deliveries, there have been over 70,000 couriers that have done at least one delivery with us. In regards to our active fleet, we can’t really tell the number because it is not stable. In a week, we’re talking about 10,000 to 12,000 active couriers, which heavily depends on the demand of the market. Let’s say for the last half of the year, it was around 10% to 12% of growth month by month.
Of course, it depends on demand, but we still see the huge interest and the potential that we have on the market, in terms of new customers acquisition.
In the same interview, it became known that as of July 2023, Ukraine ranked in the top 5 among 25 countries where the service was present. Has this position changed?
Sacha Michaud:
Yes, it’s now the third on the list.
Compared to?
Sacha:
Compared to Spain and Italy. In that order.
And how does the Ukrainian market differ from Spain and Italy?
Sacha:
It’s a great merit to the Ukraine team to rank this high. Spain, where we were born, and Italy were the first two markets where we launched. In fact, Ukraine was the 20th market we launched. And it’s already in third place and still growing so quickly.
I think that there’s a lot more similarities between the markets than differences. In Spain and Italy we operate in more cities and a lot of smaller towns, whereas in Ukraine we’re in 37 cities. So here we’re not in so many smaller areas compared to them. And that’s the biggest difference.
We know that shortly after the start of the Russian war, Glovo launched a telemedicine service in Ukraine, the only country in the world at the time. Was this launch successful and was it possible to expand this service to other countries?
Maryna:
It is a very niche service. There was not a big business idea behind that. We were believers. At the time, we saw the need to support the community, which the telemedicine services allowed to. So we opened it nationwide and you still can access the service. Our main goal was to allow people to get very quick access to the qualified consultation online. I cannot say that it is big now. It is still quite niche, however it allowed us to expand the service to home appliances repair.
In terms of the other countries, I know that the teams tried to launch it in a few other markets. The service can be added if you have good partners and customers, as such services are heavily dependent on the people. For us, it’s super important to deliver good user experience, that’s why we don’t exaggerate the numbers. We prefer quality over quantity.
Sacha:
The good thing about our app is that we have hundreds of thousands of users connecting every day. So it’s very easy for us to add and test out different services. I think the services that we launch in the future will primarily be related to delivery or, at least, to our partners, stores and restaurants, and digitizing retail businesses. But it doesn’t mean we can’t run services like telemedicine where they’re very useful for our customers.
Still, our core business that will drive growth will be around everything related to our restaurants, stores, and supermarkets.
Given the resilience that Glovo demonstrated in Ukraine, how did your business continuity plan evolve between the period of COVID, the first days of the war, and afterwards?
Sacha:
COVID was a big moment for us and our industry. Many of our countries initially closed down, which allowed Glovo to be an essential service to the economy. We were oxygen to restaurants and stores who couldn’t have physical customers. Still, it was difficult because timetables changed and it was a very strange situation to manage those operations. COVID also educated the market a lot on everything that wasn’t only restaurant food. I think it was a great moment for consumers to get used to other things, especially supermarket-bought items. And people continued using the supermarket delivery even when the pandemics finished. Although the time was difficult, at the same time, for certain industries, it was quite beneficial.
Moving forward to the Russian war in Ukraine. We initially closed down the app in every city across the whole country. Firstly, the team carefully assessed the situation. Seeing that our couriers were trying to do deliveries themselves using Telegram and Messenger, Maryna and the team advised us to reopen, which we did within 24, 48 hours in the cities which were safe to operate.
Secondly, we built some tech solutions which allowed us to switch off a city and cancel orders, which let the customers and couriers know immediately. And now we monitor the cities we are operating in, make sure that they’re safe and we keep them open. And if a city is in trouble [Air raid alerts and curfews — ed.], we close down the services.
Maryna:
On the one hand, operations are quite difficult, but on the other we have learned to be very agile in many ways, like adopting the global technology to the local needs and issues that we have from day to day.
Since the beginning of the war, Glovo has taken a fairly active volunteer position, helping businesses at the frontline with free shipping and investments. What volunteer initiatives do you support or endorse now?
Maryna:
We started doing these projects to make a difference. At the start of the war, we started receiving many self-volunteering ideas and programs from our team, for example, delivering critical medicine to people who couldn’t leave their homes. We also had a lot of products in our grocery stores, which we started giving away to the people in need. The same goes for our cloud kitchens across the country, which started preparing food for our soldiers, doctors, and for people in need. There have been a lot of small and big ideas.
Afterwards, this evolved into a more shaped program. We partnered with all the key funds in Ukraine, United 24 being our biggest partner, with whom we have another big project coming up. The total amount that we managed to donate to various charities and people, over the past two and a half years, is over €1 million.
Sacha:
In terms of global initiatives, we have our Impact Fund. Basically, we assign a small amount of money per order to this impact fund globally, and, doing millions of orders every week, it slowly accumulates. We can later invest these money into relief funds, like the one in Ukraine, where we help our couriers and partners if they face any problems. Ninety percent of our partners are small stores and restaurants, and we try to help with their business growth, as it can help us grow, too.
As it was said, we’ve donated over €1 million in different initiatives since the start of the war. And we’ll continue doing the good thing on an even bigger scale, because this fund grows at the same speed as the business.
In an interview for AIN.UA, Choice co-founder Volodymyr Olyanitsky said that his startup closely cooperates with Glovo within the Glovo On-Demand service. Can you tell us about how Choice or similar companies work with Glovo?
Maryna:
Basically, Choice is one of the integrators of Glovo On-Demand. Glovo provides the technology for small businesses in order to help to work smoothly finance-wise and operational-wise through a simple interface. Apart from Choice, there are lots of different brands that we are also working with through Glovo On-Demand.
Sacha:
It takes a lot of money to create a full cycle delivery business, starting from restaurant production, lead generation, and then delivery. Sometimes it requires even bigger investment than opening a restaurant. And, as Glovo is an expert at what we do and we have an operational fleet, we decided to support these initiatives, in order to build on our loyalty channels. It’s also beneficial to us, as we get more partners and order volumes coming through the direct integrations of the Glovo On-Demand by our delivery partners.
Two years ago, Glovo announced downsizing of global teams. How is the company doing in other markets now? How did the company manage to optimize its internal processes to overcome the crisis?
Sacha:
I think similar thing happened across all tech companies. There was a phase of very high growth where we wanted to invest in the growing businesses, which meant investing in our channels, marketing, but also in people. What we’ve been doing the last year and a half, is really focusing on profitability. Many of our markets are already profitable [Ukraine is among those countries — ed.], but we still have a lot of markets which are still growing and not profitable.
We’re also planning to become profitable in H2 this year as a company, nine and a half years after starting. This means a lot of things, but above all, it means optimizing our technology and increasing the efficiency of our teams.
In addition to Ukraine, Glovo operates in other CEE countries such as Poland, Romania, and Moldova. Can you share how the business is doing in these markets?
Sacha:
We’re extremely excited about this whole region, Central and Eastern Europe. It’s one of our fastest growing areas. We’re the market leader in the region. Of course, not all the countries are as big as Ukraine. However, Romania is also one of our top five markets, with the rest growing rapidly. We’re super excited about the results there and in the rest of the region.
Looking ahead to the second half 2024 and beyond, what are Glovo’s short and long-term goals and projections for the CEE markets and Ukraine?
Sacha:
There are two areas that we really put our focus on. The first one is growth: expanding the number of cities that we operate in. And the second is getting more partners in, for example, quick commerce, to offer our customers an even bigger choice of goods.
We’re planning to also focus on our other services, like the one we talked about, Glovo On-Demand, or, what we call it, “logistics as a service”. Being a tech enabler, helping digitalize our partners and being a great ally to them — that’s probably where growth is going to come short term.
Regarding other services, an ideal plan for us would be to start working with payment plans. Or becoming our own wallet. I think there’s great opportunities, especially in countries where we’re the market leader and we offer a lot of value. We can probably align with other local companies and do things together. And Ukraine, obviously, would be an ideal candidate.
Maryna:
There are a lot of things that are in the development stages at the moment. And Ukraine, of course, despite the current macro factors, is still the country that is great for testing new services. I don’t want to spoil anything, but there are interesting things that will definitely require more time and partners.
Sacha:
And we’ve got some cool stuff coming up in the app. You’re going to like it.
Now, let’s talk about the PowerUp conference, which took place in Kyiv on June 18. What was the motivation behind the creation of this conference? What goals did you want to achieve?
Sacha:
Helping Ukrainian startups with visibility, especially at a European level, is our main goal. I think, to have a larger impact, we should be attracting more scale-up companies to come to Ukraine. And this conference is a good opportunity to tell large international tech companies as well as investors that they can still do business and grow; that they should be investing in local startups and creating jobs for people here because it’s a really good and profitable idea. I think the kickoff event really helps with raising awareness about the real state of the Ukrainian startup ecosystem.
Can you share with us the results of the conference?
Sacha:
The first part of the conference consisted of three panels that brought together heads of Ukrainian technology companies, institutions and venture funds, representatives of state institutions, as well as industry experts in discussions on the following topics:
- How to start a company and scale it outside of Ukraine;
- How to manage a company in Ukraine despite adversity and have a successful business;
- Why is it still profitable to invest in Ukrainian companies and develop talents?
At the end of the panel discussions we were joined by the Minister of Digital Affairs of Ukraine Mykhailo Fedorov, who closed the ceremony as the final speaker. In fact, last time I met him, we talked about how we need to raise awareness outside of Ukraine about the fact that the businesses are still working here, despite many things happening. Of course, it’s difficult, there are many missile attacks every day, but people are getting on with their lives. And the most important thing right now is that we really invest in the economy.
As we know, the highlight of the conference was the Glovo Startup Lab competition, which Glovo organizes every year together with USF. Please comment on which startups took the winning places, what awards they received?
Sacha:
There were a total of nine finalists at this year’s Glovo Startup Lab [UTU, Banani, Birb, GetOrder, Getpin, Howcow, Releaf Paper, ToGether, Uspacy — ed]. At the end of the conference they presented their solutions, and we the panel judges decided on three winners:
- First place received €20,000 in funding + internship in Barcelona — Getpin, an online marketing tool that helps businesses with physical locations attract customers looking for products or services nearby.
- Second place: €10,000 funding + internship in Barcelona — Uspacy, a CRM system for small and medium-sized businesses.
- Third place: €5,000 funding + online mentoring from Glovo — Howcow, anAI system that determines the best time for cows to conceive and detects health issues.
And can you share your impression on the winners of the conference?
Sacha:
There’s huge potential in them. They’re very early on, so I do think they need guidance and help, like all other startups. I think great companies are built by great people who work hard, who just are persistent. And above all, these companies are going to grow because they have great teams, great leadership, and great ideas.They’re not going to grow because someone holds their hand. It’s super exciting and I think it’s going to be a great experience for both them and us.
To my mind, in general, companies that are built in Ukraine have a great opportunity to expand very quickly in the region and be leaders in the region. I think entrepreneurial talent is unique in this country, while technology levels are extremely high. When I came here three months before the invasion, I really felt that Ukraine was moving in the right direction. I think Ukrainian society has great tech awareness, how you embrace new things, which is quite unique compared to most European countries.
Based on past experience, how does Glovo plan to support startup winners after the competition? Are there plans for ongoing mentoring or partnerships that will help to, possibly, integrate their solutions with Glovo services?
Sacha:
First of all, apart from the money they also receive our mentoring. We can help them through our ecosystem, our partner network, and our data. We have big access to the venture capital network and to a pool of talented individuals. Obviously, we’ll help the winners as much as we can.
Concerning the latter part of the question. Generally, one of the things we don’t talk a lot about is the amount of local companies we end up partnering with doing such different things, like giving solutions to our couriers. As an example, we just mentioned Choice, or other similar companies, or even fintech. It can be a whole wide range of services that we can plug into our network. There’s always opportunities for great companies to work with us and us with them. I think it’s the key to success.
Also, related to startups. We have a project called Glovo House, which incentivizes our employees to start their own companies based on their ideas. This can ensure that our legacy is not just Glovo. Already, close to 100 startups have been founded by ex-Glovo employees. Most of them received good funding, so they’re already on the road to potentially get bigger than Glovo.
The project focuses on these main areas:
- Verification of the project. If anyone presents a project, we can look at it and, based on our experience and network, help them to redefine the project a little bit better.
- We can give them access to our network of capital, either through local funds, angels or crowdfunding within the company.
- And then of course awareness. Glovo is a well-known brand in pretty much every country we operate. So we have easy access to channels to raise awareness about any new startups our employees come up with.
Any words in conclusion?
Sacha:
Personally, it’s amazing coming here. It’s my sixth time visiting Glovo in Ukraine since we launched here. I was super energized to arrive. And also the team here is an example for the Glovo globally.
