A grocery delivery business that serviced metropolitan Melbourne and collapsed in December last year has been picked up by listed customer loyalty platform Rewardle Holdings (ASX: RXH) for just $3,000.
Announced today, Rewardle has acquired 100 per cent of YourGrocer including its grocery marketplace and delivery operations, which will be integrated into the acquirer’s platform and leveraged through RXH’s partnership with Pepper Leaf - a Melbourne-based meal kit delivery service.
As part of the transaction, Rewardle will take up YourGrocer’s assets worth $301,000 and its debt of $218,000, implying a discount of roughly $80,000 for the listed company minus expenses.
YourGrocer was an e-commerce grocery retailer that allowed customers in Melbourne to order from a marketplace of 85 independent local grocers, fruiterers, butchers and fishmongers.
The company failed due to a series of operational and funding challenges and ceased accepting orders in December last year.
Its collapse is part of a wider industry trend, which most recently saw the demise of ultra-fast deliveries app MilkRun, the failure of grocery delivery service VOLY which was acquired by direct-to-market meat supplier Our Cow, and last year’s voluntary administration of Deliveroo Australia.
Like YourGrocer, MilkRun’s demise was attributed to high levels of debt despite millions pumped into it by venture capital firms. Similarly, VOLY fell into voluntary administration with almost $18 million owed to creditors.
According to Rewardle, the assets and ongoing operating obligations of YourGrocer align with the company’s growth strategy.
“Groceries, points and rewards are a proven winner with Aussie consumers. We believe that the combination of Rewardle and YourGrocer can create an innovative, local community powered grocery service,” Rewardle founder and executive chairman Ruwan Weerasooriya said.
“YourGrocer is a pioneer of grocery delivery in Australia and we have huge respect for what their team achieved. Over the past decade they built a beloved service and brand that brought together an amazing community of customers, employees, producers, and investors.
“We’re excited about the opportunity to build on their work and carry on the mission of enabling local merchants to connect and transact with their local community.”
YourGrocer founder and managing director Morgan Ranieri - who started the company in 2013 and who has been engaged as a consultant for the acquired company for at least three years - was upbeat about the news.
“I’m excited that YouGrocer’s journey and the mission I’ve invested ten years of my life into is not over,” Ranieri said.
“There is a huge opportunity for an innovative service to challenge the well-entrenched grocery giants by harnessing changing consumer behaviours and technology to disrupt the status quo.
“I believe Rewardle is well positioned to leverage our many years of work into something very exciting.”
For Rewardle, which was founded in 2012 with a mission to encourage customers to ditch physical loyalty cards in favour of a digital alternative, the acquisition comes one month after it made a strategic $170,000 investment to fund the growth of coffee and café-sharing site Beanhunter.
“We’re looking forward to returning resources to growing our merchant network and cafes are a key area of focus. Our re-engagement with the café sector will be supported by packaging Beanhunter’s content and services into our offering,” Weerasooriya said.
“We’re on track to deliver another strong quarter and as per our strategy, we’re leveraging our positive cash flow into growth initiatives to create a compounding growth flywheel effect for the business moving forward.
“While our investment in Beanhunter is relatively small, it is strategically meaningful and a great opportunity for us to get match fit for future investment and acquisition opportunities.”
Shares in RXH are up 5.56 per cent to $0.019 per share at 12pm AEDT.
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