Generation Start-up: Instashop eyes global expansion for its grocery delivery app
The Dubai company employs 200 staff across five countries with regional growth its first priority
When John Tsioris moved to Dubai in 2013 with a well-paid job working for a lighting subsidiary of the Dutch consumer electronics group Philips, he did not feel entirely satisfied by his career move.
"I had a very strong desire to create something of my own and make the calls and give myself the chance to actually prove if something meaningful could be created on my own," says Mr Tsioris, the co-founder and chief executive of Instashop.
The UAE is a very service-oriented culture … so convenience is really important. So why don't we have an app [where] with just a few clicks our order comes directly to the door superfast?
Two years later, at the age of 28, he quit his job as a marketing intelligence manager and started Instashop, an on-demand online grocery delivery company. The app-based service allows customers to order groceries for delivery on-demand from a wide selection of supermarkets and local neighbourhood retailers. Users can choose for their shopping to be delivered in scheduled time slots or within 60 minutes from some vendors.
"On the one hand it [was about] avoiding the limitations that naturally exist in large corporations and on the other [it was about] the strong desire to create something of my own," says Mr Tsioris, from Greece.
Today, Instashop has expanded to five countries, with more than 350,000 users and one of the highest retention rates for a mobile app.
"We have a super-high retention rate of 75 per cent," says Mr Tsioris.
The journey to becoming a successful entrepreneur wasn't easy for Mr Tsioris, who began his entrepreneurial journey with Vound, a voice-based social media app he set up in the first year of his arrival in Dubai.
Driven by a passion for technology — Mr Tsioris was working with Philips in the Netherlands before relocating to the Dubai office — he asked his co-founder for both ventures, Ioanna Angelidaki, if she'd like to start something. Ms Angelidaki, 33, also from Greece, was working at the careers centre of the Technical University of Crete and also had experience at an e-commerce venture, before joining forces with Mr Tsioris.
"We ended up with Vound, which maybe was a good idea but we didn't have the experience to execute it properly, so that's how it started," says Mr Tsioris.
It was in the midst of setting up their first venture that inspiration struck for an online grocery delivery start-up.
While busy with his fledgling venture Vound, Mr Tsioris often found himself frustrated when ordering in items over the phone from grocery shops.
Sometimes the wrong items were delivered, or sometimes he and the shopkeeper could not understand each other's accents leaving Mr Tsioris wondering if there was a better way to improve the experience.
"The UAE is a very service-oriented culture with quite a strong delivery culture, so convenience is really important. So why don't we have an app [where], with just a few clicks, our order comes directly to the door superfast?" he says.
In 2015, on-demand grocery delivery via an app was still a novelty, so the pair — Mr Tsioris and Ms Angelidaki — wound down their social media enterprise and focused on developing a business geared towards optimising the grocery delivery experience.
Using the same team behind Vound, Mr Tsioris and Ms Angelidaki started developing Instashop.
Within a month they created their app and brought it to market. The bigger challenge for the team, however, was educating Dubai retailers on using the application as they were unused to this type of delivery model for grocery shopping.
"The first shop in the Dubai Marina was a struggle to get because we had to educate the retailer [on] this online trend and why it makes sense for them to join and what the added value was. So we actually convinced the retailer, we had the MVP [minimum viable product] and we started getting traction," says Mr Tsioris.
Instashop soon caught the eye of venture capitalists such as the Jabbar Internet Group, which had a stake in e-commerce venture Souq before it was acquired by Amazon in 2017 for $650 million (Dh2.39 billion).
The company also had the backing of Athens-based Venture Friends and negotiated its first fund-raising during the second half of 2015.
"The first round was around $365,000 in seed and then the public ones … were $750,000 and beyond that we had investment from Amazon as well — [which was called] Souq then," says Mr Tsioris.
After two public financing rounds and two private ones, the company has "no urgent need to fundraise" further says Mr Tsioris, adding that he is always open to exploring additional options. He declined to specify the total investment in the firm, which today employs 200 people, with 130 in the UAE alone.
After expanding to Bahrain in 2016, Egypt in 2017 and then Qatar, Lebanon and Egypt, Instashop aims to grow regionally before going global.
"[Instashop] is a hyperlocal on-demand multi-vertical marketplace. [The] Middle East is our vital area to be in the lead but [our] ambitions — as we evolve and grow and … become more sophisticated as an organisation — are more global," says Mr Tsioris.
The company derives its revenue from commissions paid by the supermarket as well as the customers. Mr Tsioris declined to specify the revenue generated in 2019. The company, however, plans to double its growth in terms of size, number of orders and the value of sold items.
"Generally Instashop has been doubling year-on-year consistently since its inception," he says.
For now the company is focusing on adding new verticals to its business, such as the delivery of flowers in December and large gallon water bottles earlier this year.
"Birthday cakes and stationery are other verticals that we're considering as well," says Mr Tsioris, adding that he is also excited about
ethnic foods, with Spanish, Turkish and South Korean foodstuffs added so far and plans to launch an Indian ethnic food section as well.
While word of mouth was instrumental in terms of securing the company wider visibility, Mr Tsioris also credits the efficiency of his team to the app's popularity.
"To deliver groceries that a customer ordered at the promised time … very few teams are able to execute groceries and keep users within the region and be successful," he says.
Updated: February 16, 2020 09:53 AM