Flexible financing bolsters growth for Picnic

Online supermarket Picnic is growing fast with its green mass-market approach to online grocery shopping.

“DLL really came through for us at the right moment,” says Thomas Zelders from Picnic Corporate Development. “They helped us free up cash from our existing electric fleet to finance our growth strategy and provided additional financing for new delivery vehicles to meet our upsurge in demand.”

The modern milkman saves time, money and food wastage
In 2015, Picnic was founded by four entrepreneurs who had a vision for creating a more cost-effective and sustainable way to get groceries delivered, based on a modern milkman system. Today, they have built a successful online supermarket, powered by a smart app, green fulfilment centers and clean electric delivery vehicles. Picnic was named the fastest growing Dutch company in 2019, with half a billion euro in sales to 150+ cities in The Netherlands and Germany.

“People love Picnic,” says Thomas Zelders from Picnic Corporate Development. “We deliver groceries to your door for free, complete and on time down to the minute, saving loads of time, and our fulfillment centers reduce food waste by over 70%. In a new city, over half the households sign up for our service and after a year we are the online market leader. Once they become a customer, they usually stay forever.”

Heavy investment in infrastructure
This success is not for free. “That’s why groceries were last to go online; it’s also the hardest,” says Zelders. “We are building a mass home delivery system, and we invest heavily in that infrastructure.”

When Picnic continued to expand its German operations in 2019, they turned to asset financing specialist DLL to help finance its large fleet of delivery vehicles.

“We saw a huge potential with Picnic’s sustainable solutions for delivering groceries,” says Marco Wagner, VP New Business Development at DLL. “There was an immediate click between us because of our focus on sustainable business models that marry profitability with environmental and social benefits.”

At the time, Picnic was buying all of its vehicles with cash, so substantial capital was tied up in their fleet. Then in March, the Corona pandemic broke out. “We saw the change from one day to the next,” says Frederic Knaudt, founding team of Picnic Germany. “Suddenly 5 to 10 times more people were signing up, and we already had a waiting list for new customers.”

Driving new growth with asset financing
Picnic faced a huge timing challenge. Suppliers deliver vehicles to Picnic every week. If they can’t deliver to Picnic, their yard fills up. Everything in the system has to work with military precision.” Zelders says, “Because of our significant growth, we needed to significantly expand our fleet to meet the demand, otherwise we had to turn away customers or deploy capital needed for other things, on new vehicles.”

“The scale of this project was unique. We spent a lot of time understanding the electric vehicles, which are not yet standard assets,” says Jens Mensing, DLL Senior Key Account & Fleet Solutions Manager, Germany. “Picnic is growing its fleet very rapidly, and it’s been a challenge to get all of the pieces in place, the lease structures and documents, invoicing and equipment delivery processes. It took a few months, but we were able to provide the financing they needed, when it really made a difference.”

Getting new delivery vehicles on the road, on time
“DLL really came through for us in challenging times. They quickly helped us free up cash from our existing fleet to finance our growth strategy and provided additional financing for new vehicles to meet our upsurge in demand,” says Zelders. “With the close to 350 DLL-financed vehicles, we are able to deliver literally millions of products to our customers every week.”

“It has been a hectic time, trying to get everything in line that we need to serve our customers,” says Knaudt. “We are trying to use the fleet we have as efficiently as we can. Thanks to DLL, the fleet has not been the bottleneck in the process.”

“DLL really believes in Picnic,” says Zelders. “They put a lot of effort into learning about our business models and the dynamics of our market. They provided us with a financing facility that really fits our business needs and liaised directly with our suppliers. DLL has supported us at every step in order to make the process as lean and quick as possible. It has been a tremendous help that we are able to finance the growth of our fleet with DLL.”

The future looks bright
As more consumers embrace online grocery shopping, the future holds many opportunities for DLL and Picnic to grow together.

“DLL can play a key role as we expand into other countries in Europe,” says Zelders. “Besides our electric last mile delivery fleet, we can look at financing several other assets. We are heavily investing in automation, and DLL can definitely play a role there too. This is just the beginning. It’s gotten off to a flying start, and I see many other opportunities to work with DLL ahead.”

“We can draw upon our experience in financing automation, logistics, fulfilment and other areas to broaden our services for Picnic,” says Wagner. “We also see tremendous potential to help them as they expand across countries, by templating the process we’ve developed to save them time and effort in accessing capital.”

Learn more about DLL’s Fleet Solutions offering for large fleet companies here.