Food.de founder Karsten Schaal interviewed: Do German VCs suffer from German angst?

Sinking financing requests from the e-commerce branch led to Capnamic Venture calling the end of the e-commerce hype last month. Are all niches really completely filled? Where are the innovative ideas in the start-up scene? With ABOUT YOU, project Collins has shown that there is still room to the top. You should also keep an eye on Rocket Internet when it comes to promising ideas.

Especially the online grocery trade seems to be Samwer’s favourite playground at the moment. We spoke to Karsten Schaal, founder and CEO of Food Direkt GmbH. His team sells over 10,000 items at supermarket prices on his platform food.de. Apart from the current situation in online grocery trade, we also wanted to know what he thinks of German VC’s level of willingness to take risks.

Thank you for taking the time to speak with us Karsten. How do you think the online grocery trade has changed?

In the beginning, every journalist asked if grocery trade in the net was even possible. Serious tests and comparisons were made later. Eventually, the first people started talking about a new boom-topic. Tellingly, only once they were absolutely sure they couldn’t be wrong. More and more users are now discovering the new way of shopping. In numbers, this means an annual organic market growth of 30 percent.

“Replacement items are a problem for online grocery trade” – according to the title of a t3n article. How do you deal with the problem of replacement items at food.de?

Replacement items, complete service, do everything right. What would it be like to just get things right for once and guarantee it as well? Apple offers and phone and you know it works, because everyone has to use the service in the way it is offered. If you’re not happy with it, you have to find another provider. This sounds harsher than it is. In our case, services are constantly adjusted and improved. If customers order something they should get it. How to behave if something does go wrong still has to be established. No one has found the golden solution yet.

With Bonativo and EatFirst, Rocket Internet has entered the stage. There is also start up HelloFresh, which has been supported since 2011. It is time for a consolidation in online grocery trade?

Consolidation comes when the market is saturated. This is still a long way ahead. Every one of the so-called start-ups serves a very specific target group and everyone creates more online acceptance. Consolidation happens when the cake is divided up.

What does a start-up have to have to be successful in the online grocery and delivery branch these days?

Money or a good niche. These days, everything is about who can have the growth tap running the longest, or can develop a recommendable model. It is always more difficult for new players to get ahead. With some business models, young online grocery traders even have to be careful not to because victims of the disruption themselves. But I assume that the market will lead many different models to success at the same time.

You have experience when it comes to convincing VCs to support your company. Are German VCs too careful?Sind deutsche VCs zu vorsichtig?

You couldn’t have posed the question more clearly. There is a grain of truth to it. From one investor you hear “that can’t be good, otherwise every idiot would do it,” from the next, “the Samwers are doing something similar, let’s wait and see what happens.” What are you supposed to think? Never the less, we did get great investors who believed in our idea early on, so there is some hope.

It is clear that there is a different start-up culture in the USA. What do you think of the fact that companies, like jet.com were able to gather 220 million US dollars even before their launch?

Why jet.com got that kind of financing is another story. Firstly, it is a new version of a well-known founder team, and secondly, a bet to see if they can build-up a competitor for Amazon before it is too late.

The principle of club shopping as jet.com implements it is not new. The time is not always ripe for a new idea, an experience you have also had with online grocery trade. 15 years ago, would you have thought that you would (again) be active in this e-commerce sector?

15 years ago I already knew that there would be a large market for online groceries. But I would never have thought that it would take this long. Providers have established themselves in almost every European country since then, only the German press is still discussing whether or not it is possible: A German phenomenon which is described as “German Angst” overseas.

We thank you for the interview and wish food.de further success in the highly competitive online grocery market!