The success story of the Spanish startup Glovo
Glovo, the leading home service company, was born out of the concerns of a Catalan entrepreneur who, far from settling into his job as an engineer, decided to take the leap and follow in the footsteps of startups such as Airbnb or Uber that were triumphing in other countries. But what was it that allowed him to go so far? In this post we analyze the The success story of Glovo, one of the main Spanish startups that became a unicorn.
What is Glovo?
Glovo It is the app that offers users access to any product in your city in a matter of minutes. And how do you achieve this? Thanks to the core of its business: the technology it has developed, capable of connecting customers, local businesses and delivery people. The application was born with the objective of transforming the way in which users get what they need, making cities more accessible. In addition, the company not only seeks to provide access to any product, but also generate a positive impact on the economy, society and the environment.
Glovo: the beginning of its story
Óscar Pierre He is a Barcelona native who graduated in Aerospace Engineering at Georgia Tech. But, having been working at Airbus, he felt that the job didn't fit his aspirations. Then, Pierre, just 21 years old and inspired by other companies, began to build his empire. He developed an initial version of an application called Globo, but he quickly changed it to Glovo to make it more unique. This is how the Spanish home delivery company present in more than 20 countries and operating in more than 140 cities. The CEO and co-founder launched into the world of entrepreneurship developing an innovative idea, an app in which the user can ask for anything they need, because there is always a “glover” willing to take it to him in a matter of minutes. Pierre decided to bet on a business model based on the collaborative economy, but always focusing on the concept of saving time. This idea was the idea with which he conquered investors, including Sacha Michaud, co-founder of Glovo. Initially, the investment was approximately 100,000 euros, although it was in March 2015 that Glovo was officially born.
Glovo's funding rounds
Once the business model was established, and the company was officially formed, Glovo added rounds of funding over the years. In August 2016, it obtained a round of 5 million euros from investors who had already invested in other applications, such as Cabify or Snapchat. With the capital raised, Pierre decided to invest in continuing to improve the application in order to expand to more cities, beyond those in which the company was established at the time (Barcelona, Madrid, Valencia, Paris, Milan). In 2018, Glovo achieved investments that reached 115 million euros, which were allocated to consolidate the company's international expansion. This milestone raised the valuation of the application to more than 300 million euros. However, it wasn't until 2019 that Glovo made its big leap. During that year, two rounds of funding were closed, each of which amounted to 150 million euros, and were used to make the app simpler and more efficient. Thanks to these movements, the company's valuation exceeded $1 billion. That's how it began to Accompany Cabify as a unicorn in Spain.Later, in 2021, the company managed to close the highest funding round in the history of the digital sector in Spain: a series F investment round for 450 million euros.
The sale of Glovo in Latin America and its positioning in other markets
Between 2018 and 2020, Glovo experienced an expansion in Latin America, with its first destination being Chile, followed by Peru, Argentina, Brazil... In 2020, the company announced the selling your business in LATAM to Delivery Hero, belonging to the food delivery sector, in a transaction valued at 230 million euros. The objective was to focus, above all, on its European market and improve the company's profitability. In 2021, Delivery Hero expanded its investments and became a majority shareholder with 94% of Glovo's shares. Even so, after closing its largest funding round of 450 million euros, Glovo, with 4 technology centers and more than 3,000 employees, acquired 6 new companies to continue growing.In Spain, the company adapted to the Rider Act, while offering more rights and social benefits to delivery people around the world. In addition, it officially became Carbon-neutral.
Jarvis, the main algorithm of the Spanish startup
At Glovo they are aware of the importance of automate and optimize manual processes in an industry where time and efficiency are paramount. In this case, its algorithms are essential for completing orders faster, assigning requests to couriers, ensuring that stores and restaurants receive more orders, and shorten distances to reduce carbon emissions, among other things. The main algorithm that Glovo uses to deliver orders to deliverers as efficiently and quickly as possible is called Jarvis. This one is responsible, in other words, for automate orders that were previously offered to delivery people manually.Jarvis feeds on information obtained through other algorithms, and thanks to this he is able to make the best decisions at a global level. Every few seconds, the algorithm can collect information about the number of orders placed and the active messengers connected to the app. Taking into account the distance between the collection point, the delivery point and the location in real time, Jarvis offers the order to the optimal courier. In addition, it is very accurate, since it also takes into account factors such as order preparation time, traffic, delivery vehicle, seasonality, etc. All of this is possible thanks to the use of artificial intelligence, with which it manages to make its processes more efficient and improve.
The keys to Glovo's success
One of the keys to the success of this company is that has reinvented home delivery by allowing the user to order anything they need (from food from a restaurant to shopping at the supermarket). The advantage of being able to order anything is added The speed of delivery. Today's user doesn't want to wait 24 or 48 hours to receive a shipment, so Glovo delivers as soon as possible and as quickly as possible, reducing the waiting time to minutes. Another factor that has influenced its success is the choice of cities in which to operate, all large, cosmopolitan and innovative. In them, the inhabitants are a target audience very similar to this type of service, which makes them take great care of the customer experience so that it is always satisfactory. And that speed and quality are achieved thanks to technology. As can be seen, the Spanish entrepreneurial ecosystem is growing faster than it seems, the impact of startups on the market is increasing, and Glovo is a good example of this.
