A group of Russian entrepreneurs has raised $46 million to launch a food delivery company on the US market. Dubbed ‘Buyk,’ the service is an analog of Samokat, a successful startup which was born in St. Petersburg and acquired last year by Mail.ru Group and Sber.
Buyk is the brainchild of Samokat co-founders Vyacheslav Bocharov and Rodion Shishkov, jointly with Sergey Sulgin, the general manager of Arrival, a Russian-founded UK electric vehicle maker. The new company will leverage the technology developed by Samokat in Russia, and receive support from Sber, notes Bloomberg.
Buyk is already hiring about 100 people for operations and 500 couriers, Buyk told the business news agency.
The new company’s investor pool includes three VC funds or firms with Russian roots — Fort Ross (backed by Sber), Citius and CM Ventures — and unnamed “international business business angels.” CM Ventures and Fort Ross invested $15 million each reported Vedomosti.
Under plans, the service will be launched in August in New York, aiming to reach 10,000 orders every month by late 2021. Buyk says it has agreements with dark stores to support local operations.
Russian competitive advantage?
A plethora of food delivery service already operate in the US megacity — from Amazon, to FreshDirect, to Instacart, to Walmart, to cite just a few big ones.
Buyk, nevertheless, intends to become a US market leader. There are “no serious players yet” in the specific segment Buyk is targeting, Shishkov told Russian business daily Vedomosti.
The Russian entrepreneur also argues that Buyk’s real-time delivery retail technology provides a specific competitive advantage, since it has been developed and improved by Samokat for three years already.
In an exchange with Bloomberg, Russian e-commerce expert Boris Ovchinnikov concedes that the Russian-founded company knows “how to scale a project very quickly in new cities.” But it will still face the “big challenge” of dealing with US labor costs, which are way higher than in Russia.
The median hourly wage for food and grocery delivery drivers is around $16 in the US, according to Gridwise, cited by Bloomberg, while Samokat pays its couriers in Russia 190 rubles per hour on average (some $2.6 at the current exchange rate).
Russian entrepreneurs from Berlin, to London, to San Francisco
As reported by East-West Digital News, Russian-founded express delivery companies are springing up across the world. The most notable examples include:
- Getfaster.io, a German fresh product retail and delivery company which started operations in Germany in January (raised €1.5 million in early 2021 with plans to raise another 30 million later this year);
- FoodRocket, launched by Vitaly Alexandrov in San Francisco (raised $2 million in May 2021);
- Fridge No More, which serves clients in several areas of New York City (secured more than $15 million in March 2021);
- Jiffy, founded in November 2020 to deliver fresh products, meals and household essentials in London (raised $6.6 million in April)
- Yandex’s Yango Deli, which already operates in Israel and is in the process of launching operations in France and in the UK.
Another entrepreneur from Russia established in California, Alex Vasilkin, has developed a last-mile delivery management solution. His startup, dubbed Cartwheel, helps businesses launch in-house delivery or upgrade their third-party delivery infrastructure. In May 2021 Cartwheel raised $1 million from Portillo, as reported by Restaurant Business, following a successful experience with this restaurant chain as a solution provider.
This story also appeared in The Moscow Times, a partner of East-West Digital News
