It’s not just instant-delivery startups that are facing challenges. Oda, the Norway-based online supermarket delivery service, has confirmed it will lay off 150 employees as it scales back its expansion plans to focus solely on its home market and Sweden, where it merged with the online grocery Mathem last year.
Despite raising hundreds of millions of dollars and once being valued as high as $900 million in a SoftBank-led round during its Vision Fund investment boom, Oda now aims to become profitable in Norway and Sweden by next year.
Oda’s pullback is part of a broader trend in the instant grocery delivery sector, where many startups have either been sold off or acquired at a fraction of their raised capital due to struggles with unit economics amid slow growth. This trend reached a critical point in April when Getir, a Turkish startup that raised $2.3 billion, announced layoffs and a retreat to its home market to cut losses.
“Grocery is the largest category in retail, but even the most capable organizations in the world have struggled to find an online model that works. Online grocery is hard — complex orders with perishable items and a multi-temperature supply chain in a highly price-sensitive category,” Oda’s CEO, Chris Poad, wrote on LinkedIn last week before announcing the layoffs.
Poad, who joined the company in April, bringing experience from Amazon, Tesco, and Google, replaced co-founder Karl Munthe-Kaas, who stepped down after the board reportedly requested it following what Norwegian media described as Oda’s “foreign fiasco.”
Riding on substantial funding and the pandemic-driven boom for online grocery delivery, Oda initially aimed to expand across the Nordics and northern Europe. However, in 2023, the company decided to end its retail operations in Finland after just one year, followed by Germany.
While Oda has been cutting back its own-brand expansions, it has also been consolidating with other grocery retailers. Its merger with Sweden’s Mathem in 2023 was touted to make it the largest online grocery retailer in the Nordics with revenues exceeding NOK 5 billion ($471 million).
Now, Oda has confirmed it is postponing its international expansion strategy.
This situation highlights both the exuberance of investors before 2022 and the subsequent difficulties startups have faced in meeting growth projections.
Founded in 2013, Oda established itself as a strong regional player in online grocery delivery in Europe, alongside others like Ocado in the U.K., Rohlik in the Czech Republic, Picnic in the Netherlands, and Everli in Italy.
The pandemic led to a surge in online shopping, prompting SoftBank’s Vision Fund to lead a $265 million round for Oda in 2021, valuing it at $900 million. However, by late 2022, Oda was raising $151 million at a valuation of $353 million. Recently, based on financial reports from its largest shareholder Kinnevik, Oda’s pre-layoff value would have been just SEK 2.56 billion, or $245 million.
