Home Run
Shopping & delivery service for your groceries. From the supermarket to your door in as little as 1 hour
- Location
- London, United Kingdom
- Partner
-
JamJar
Categories: Food & Beverage Mixed Digital/Non-Digital Mixed B2B/B2C
-
Investment
sought: - £450,006
-
Equity
offered: - 10.09%
-
Investment
amount: - £558,307
-
Valuation
(pre-money): - £4,010,132
Team
-
CEO & Co-Founder -
COO & Co-Founder -
CTO & Co-Founder -
Chief of Staff -
Head of Customer Operations -
Software Engineer -
Senior Product Designer -
Senior iOS Engineer
Idea
Introduction
Home Run is a 1 hour grocery shopping and delivery service. Our model is centred around speed and simplicity.
Customers can select their favourite supermarket and place a grocery order to be delivered in as little as 60 minutes!
Like Airbnb, the rental company who own no properties, we are the grocery delivery company without stores or stock. We fulfil from existing supermarkets, so we have no need for warehouses or vans. Our personal shoppers hand pick orders from in store and our car/scooter drivers deliver to our customers' door.
After 2 successful years in West London we have fulfilled tens of thousands of orders. Today, we deliver from Tesco, Whole Foods, Marks and Spencer and Waitrose.
Our technology and operations are now of a high enough standard to license out and this is our next big step. We are in advanced conversations with some of Europe's largest supermarkets about how Home Run can provide a tailored solution to take them online: we call this, Powered by Home Run.
Intended impact
Ours is a model which provides the ultimate online ordering and grocery delivery experience. No more scheduling your life around expensive and long-awaited delivery slots. No more hours wasted wandering around the supermarket and no surprise replacements at the door thanks to our sophisticated replacement system which allows you to accept or reject suggested replacement items for anything that is out of stock before the order leaves the store. We are demonstrating that this model will become the norm and that it can be done profitably.
We plan to be able to make this impact via our own platform and our licensing agreements with the grocery retailers across Europe. We will provide them with everything: a fully branded e-commerce platform, a fleet of specially trained shoppers and drivers, the benefits of all of our technology, customer support – even marketing. Our infrastructure is ready to go and we can roll this out on their behalf in a matter of weeks.
Substantial accomplishments to date
Since raising our pre-seed round in April 2016, a lot has happened!
- By August 2016, our three co-founders had personally delivered over 1,000 orders – not a small achievement when you consider that they were running the business simultaneously!
- In September 2016, we became the first ever business to take Marks & Spencer groceries online since they opened their first food store in 1931!
- By January 2017, we had three more of the biggest names in the UK retail grocery market live on the platform: Tesco, Whole Foods and Waitrose.
- In January we also signed our first official partnership with a major UK grocery retailer, with an agreed revenue share model.
- In April 2017 we successfully raised £1M in a seed round led by one of London’s most well-respected funds: JamJar (the Innocent Drinks founders). We set about putting the money to good use.
- By September 2017, we had hired a tech team...
- ...And they got to work. Within a month we launched our iOS app!
- In November we began building our Operations team. In the New Year we hired a Head of Customer Operations who has a background at Amazon, to take over our Operations function and make it sharper, higher performing and unlike any other function of its kind.
- In April this year, we began working with LuxuryRetreats, the Airbnb owned luxury short term property rental company. They offer a fridge-filling service for their guests and will now be ordering their groceries from Home Run!
- As of May this year, we have generated just under £1M in revenue over the last 12 months.*
*Based on unaudited management accounts.
Monetisation strategy
We make money by charging a small markup on certain goods, our delivery fee, and income from our revenue share model, and are currently making a 20% margin on every order. So far, our growth strategy has been focused on density; we decided to concentrate on getting as many customers as possible in a specific area. We made this decision after raising our initial funding to ensure we could sustain and increase demand and we estimate that we managed to capture roughly 9% of the online grocery market, by sales, in our particular geography.
We now want to replicate our success across London and our platform will continue to generate revenue in this way. Moving forward, we believe there will be enormous monetary value in our licensing agreements with supermarkets across Europe. There is also the potential to generate income from commercial deals with brands such as Proctor and Gamble, Johnson & Johnson and the like, who will also, therefore, be able to tap into the online consumer market.
Use of proceeds
Team
Like any business, we’re only as good as our people. Operations and technology in particular require exceptional talent so that we can deliver an exceptional service to our customers and we have unwaveringly high standards across the board. Marketing also is a function into which we will be concentrating our recruitment efforts, as marketing will be key to our growth.
Commercial Agreements with Supermarkets
We are in advanced conversations with multiple European grocery retailers and we will need to invest significantly in these deals. This investment will ensure that we are able to roll out our ready-to-go technology, operations to the scale required by our partners. We should be able to do so in a matter of weeks and to the scale that is needed.
Expansion and Marketing
In particular we will be focusing on how we can fortify our online and offline marketing efforts. Marketing and expansion go hand in hand and we aim to be at the forefront of every grocery consumer’s mind.
Note to investors:
Investors via Seedrs are investing on the same share price as the lead investor in the funding round but into a different share class. Please see more information under “Share Classes” below.
Key Information – Share classes
Please note that this campaign reflects investment from two lead investors.
The company has two share classes – ordinary shares and preferred shares.
One of the lead investors in this round, representing £150,000, will receive preferred shares. The other lead investor and those investing via Seedrs will receive ordinary shares (so that they can qualify for EIS eligibility).
The preferred shares have a right to receive 1x their initial investment ahead of ordinary shareholders in the event of a liquidation, distribution of proceeds or exit. These are non participating preferred shares meaning that once 1x the initial investment is paid any surplus is distributed to the ordinary shareholders on a pro-rata basis. The preferred shares are convertible to ordinary shares; the preferred shareholder can choose to participate pro rata alongside ordinary shareholders (ie if this would give them a greater return than the 1x preference) OR receive their 1x preferential return
Market
Target market
Put simply, our target market is anyone who buys groceries – and that is everyone.
Our basket size ranges from under £20 to several hundred pounds; our average size varies between £50 and £60. Whether it is a weekly food shop or bits and pieces for a barbecue, Home Run has made it possible for everyone to have their groceries brought to their door on the day that they need them.
As well as individuals and families, our customers also include concierge services who order on behalf of their clients. We recently began working with luxury property company, Luxury Retreats, who are owned by Airbnb and who will be filling their guests fridges’ with groceries ordered through Home Run. These customers form an important segment of our target market as they represent a significant opportunity for us in terms of order size and frequency with the potential for multiple check-ins and therefore multiple orders per property, per week.
Characteristics of target market
Online groceries make up just 6.7% of the entire UK grocery market, yet this relatively small percentage is worth £11billion and is the fastest growing segment of the grocery market.
There have been many exhaustive studies carried out as to why offline customers are reluctant to try online grocery shopping: long wait times for delivery slots, missing or broken items, little to non-existent customer service and expensive delivery costs are among the most common reasons cited. Home Run is solving every one of these issues.
67% of current online consumers have indicated that they would spend more money if they could get same day delivery. We believe we will, therefore, convert current online grocery consumers by being faster and providing a higher level of service than other online grocery business.
Crucially, we will also convert exclusively offline grocery customers by being one of the first online services that fits the modern consumer. Fast, intuitive, affordable and simple.
Marketing strategy
Our marketing channels have been largely digital and we’ve made good use of many of the usual suspects: Google AdWords, Facebook and Instagram. We have also carried out re-marketing via email and offline marketing via door to door flyer distribution.
Now, we want to get our name out there by other means like targeted promotions and referral schemes. We’ll also be making the most of our fleet of shoppers and drivers by rolling out branded equipment like scooter boxes and uniforms, as well as ensuring our shoppers have discount codes on hand to give to anyone who might approach them. We also recently bought our first Home Run advertising bicycle and we plan on rolling these out across our delivery area on a wider scale.
Competition strategy
It could be argued that every grocery retailer, online or offline, large or small, is a competitor of ours. In reality, however, this is not the case. It would be very difficult to do a complete grocery shop from a convenience store, and we believe that no one can offer the speed of delivery that we can. Same day grocery delivery will soon be the norm and at the moment, the quickest that others in the market can deliver is within 24 - 48 hours. We deliver in 1 hour.
The “Ocado model” uses warehouses to fulfil orders, which are expensive and simply not viable for scale as they limit the radius of delivery as well as the speed. We fulfil from in store and therefore are not subject to these limitations. The only other business that delivers with comparable speed is Amazon with their Prime Now service. Unlike Amazon, however, our model means we have access to hundreds of ready-made fulfilment centres: the stores belonging to the supermarkets who we host on our platform.
Home Run has the advantage. Working with multiple large supermarkets on our platform will ensure that they retain their current consumers and also tap into an enormous ocean of new customers. Also, for any supermarket with whom who we sign a licensing deal, we believe we could launch their online grocery delivery service in a new city within a month.
Idea
Introduction
Home Run is a 1 hour grocery shopping and delivery service. Our model is centred around speed and simplicity.
Customers can select their favourite supermarket and place a grocery order to be delivered in as little as 60 minutes!
Like Airbnb, the rental company who own no properties, we are the grocery delivery company without stores or stock. We fulfil from existing supermarkets, so we have no need for warehouses or vans. Our personal shoppers hand pick orders from in store and our car/scooter drivers deliver to our customers' door.
After 2 successful years in West London we have fulfilled tens of thousands of orders. Today, we deliver from Tesco, Whole Foods, Marks and Spencer and Waitrose.
Our technology and operations are now of a high enough standard to license out and this is our next big step. We are in advanced conversations with some of Europe's largest supermarkets about how Home Run can provide a tailored solution to take them online: we call this, Powered by Home Run.
Intended impact
Ours is a model which provides the ultimate online ordering and grocery delivery experience. No more scheduling your life around expensive and long-awaited delivery slots. No more hours wasted wandering around the supermarket and no surprise replacements at the door thanks to our sophisticated replacement system which allows you to accept or reject suggested replacement items for anything that is out of stock before the order leaves the store. We are demonstrating that this model will become the norm and that it can be done profitably.
We plan to be able to make this impact via our own platform and our licensing agreements with the grocery retailers across Europe. We will provide them with everything: a fully branded e-commerce platform, a fleet of specially trained shoppers and drivers, the benefits of all of our technology, customer support – even marketing. Our infrastructure is ready to go and we can roll this out on their behalf in a matter of weeks.
Substantial accomplishments to date
Since raising our pre-seed round in April 2016, a lot has happened!
- By August 2016, our three co-founders had personally delivered over 1,000 orders – not a small achievement when you consider that they were running the business simultaneously!
- In September 2016, we became the first ever business to take Marks & Spencer groceries online since they opened their first food store in 1931!
- By January 2017, we had three more of the biggest names in the UK retail grocery market live on the platform: Tesco, Whole Foods and Waitrose.
- In January we also signed our first official partnership with a major UK grocery retailer, with an agreed revenue share model.
- In April 2017 we successfully raised £1M in a seed round led by one of London’s most well-respected funds: JamJar (the Innocent Drinks founders). We set about putting the money to good use.
- By September 2017, we had hired a tech team...
- ...And they got to work. Within a month we launched our iOS app!
- In November we began building our Operations team. In the New Year we hired a Head of Customer Operations who has a background at Amazon, to take over our Operations function and make it sharper, higher performing and unlike any other function of its kind.
- In April this year, we began working with LuxuryRetreats, the Airbnb owned luxury short term property rental company. They offer a fridge-filling service for their guests and will now be ordering their groceries from Home Run!
- As of May this year, we have generated just under £1M in revenue over the last 12 months.*
*Based on unaudited management accounts.
Monetisation strategy
We make money by charging a small markup on certain goods, our delivery fee, and income from our revenue share model, and are currently making a 20% margin on every order. So far, our growth strategy has been focused on density; we decided to concentrate on getting as many customers as possible in a specific area. We made this decision after raising our initial funding to ensure we could sustain and increase demand and we estimate that we managed to capture roughly 9% of the online grocery market, by sales, in our particular geography.
We now want to replicate our success across London and our platform will continue to generate revenue in this way. Moving forward, we believe there will be enormous monetary value in our licensing agreements with supermarkets across Europe. There is also the potential to generate income from commercial deals with brands such as Proctor and Gamble, Johnson & Johnson and the like, who will also, therefore, be able to tap into the online consumer market.
Use of proceeds
Team
Like any business, we’re only as good as our people. Operations and technology in particular require exceptional talent so that we can deliver an exceptional service to our customers and we have unwaveringly high standards across the board. Marketing also is a function into which we will be concentrating our recruitment efforts, as marketing will be key to our growth.
Commercial Agreements with Supermarkets
We are in advanced conversations with multiple European grocery retailers and we will need to invest significantly in these deals. This investment will ensure that we are able to roll out our ready-to-go technology, operations to the scale required by our partners. We should be able to do so in a matter of weeks and to the scale that is needed.
Expansion and Marketing
In particular we will be focusing on how we can fortify our online and offline marketing efforts. Marketing and expansion go hand in hand and we aim to be at the forefront of every grocery consumer’s mind.
Note to investors:
Investors via Seedrs are investing on the same share price as the lead investor in the funding round but into a different share class. Please see more information under “Share Classes” below.
Key Information – Share classes
Please note that this campaign reflects investment from two lead investors.
The company has two share classes – ordinary shares and preferred shares.
One of the lead investors in this round, representing £150,000, will receive preferred shares. The other lead investor and those investing via Seedrs will receive ordinary shares (so that they can qualify for EIS eligibility).
The preferred shares have a right to receive 1x their initial investment ahead of ordinary shareholders in the event of a liquidation, distribution of proceeds or exit. These are non participating preferred shares meaning that once 1x the initial investment is paid any surplus is distributed to the ordinary shareholders on a pro-rata basis. The preferred shares are convertible to ordinary shares; the preferred shareholder can choose to participate pro rata alongside ordinary shareholders (ie if this would give them a greater return than the 1x preference) OR receive their 1x preferential return
Market
Target market
Put simply, our target market is anyone who buys groceries – and that is everyone.
Our basket size ranges from under £20 to several hundred pounds; our average size varies between £50 and £60. Whether it is a weekly food shop or bits and pieces for a barbecue, Home Run has made it possible for everyone to have their groceries brought to their door on the day that they need them.
As well as individuals and families, our customers also include concierge services who order on behalf of their clients. We recently began working with luxury property company, Luxury Retreats, who are owned by Airbnb and who will be filling their guests fridges’ with groceries ordered through Home Run. These customers form an important segment of our target market as they represent a significant opportunity for us in terms of order size and frequency with the potential for multiple check-ins and therefore multiple orders per property, per week.
Characteristics of target market
Online groceries make up just 6.7% of the entire UK grocery market, yet this relatively small percentage is worth £11billion and is the fastest growing segment of the grocery market.
There have been many exhaustive studies carried out as to why offline customers are reluctant to try online grocery shopping: long wait times for delivery slots, missing or broken items, little to non-existent customer service and expensive delivery costs are among the most common reasons cited. Home Run is solving every one of these issues.
67% of current online consumers have indicated that they would spend more money if they could get same day delivery. We believe we will, therefore, convert current online grocery consumers by being faster and providing a higher level of service than other online grocery business.
Crucially, we will also convert exclusively offline grocery customers by being one of the first online services that fits the modern consumer. Fast, intuitive, affordable and simple.
Marketing strategy
Our marketing channels have been largely digital and we’ve made good use of many of the usual suspects: Google AdWords, Facebook and Instagram. We have also carried out re-marketing via email and offline marketing via door to door flyer distribution.
Now, we want to get our name out there by other means like targeted promotions and referral schemes. We’ll also be making the most of our fleet of shoppers and drivers by rolling out branded equipment like scooter boxes and uniforms, as well as ensuring our shoppers have discount codes on hand to give to anyone who might approach them. We also recently bought our first Home Run advertising bicycle and we plan on rolling these out across our delivery area on a wider scale.
Competition strategy
It could be argued that every grocery retailer, online or offline, large or small, is a competitor of ours. In reality, however, this is not the case. It would be very difficult to do a complete grocery shop from a convenience store, and we believe that no one can offer the speed of delivery that we can. Same day grocery delivery will soon be the norm and at the moment, the quickest that others in the market can deliver is within 24 - 48 hours. We deliver in 1 hour.
The “Ocado model” uses warehouses to fulfil orders, which are expensive and simply not viable for scale as they limit the radius of delivery as well as the speed. We fulfil from in store and therefore are not subject to these limitations. The only other business that delivers with comparable speed is Amazon with their Prime Now service. Unlike Amazon, however, our model means we have access to hundreds of ready-made fulfilment centres: the stores belonging to the supermarkets who we host on our platform.
Home Run has the advantage. Working with multiple large supermarkets on our platform will ensure that they retain their current consumers and also tap into an enormous ocean of new customers. Also, for any supermarket with whom who we sign a licensing deal, we believe we could launch their online grocery delivery service in a new city within a month.
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