Business Leader recently spoke to Timo Boldt – the Founder and CEO at Gousto. Recently identified as a ‘unicorn’ with a billion-dollar valuation, the meal delivery business is booming, but how does he plan to keep the company relevant? And why is data the real driver for its success?
What inspired you to set up the business?
Having worked super long hours in investment banking, I realised how difficult it was to find the time to cook healthy meals from scratch that I really enjoyed eating. It also became clear how much food was being wasted by people with similarly busy lifestyles to me. I thought there must be a better way.
I identified an opportunity which incorporated consumer trends at the time of food, convenience and online. The solution being a regular delivery service direct to people’s homes with all of the ingredients provided and already measured out, with easy-to-follow recipe cards. So, I quit my job in investment banking at the age of 26, to create Gousto.
Can you tell us more about your funding journey with the business – what are the most important things you’ve learnt about raising funds for growth?
Looking back to our first ever fundraise, I recall how difficult my original business partner and I found it to dilute our ownership of the business. We had spent many days, weeks and months dreaming the Gousto concept up and getting the business started. However, as you realise that your idea and vision has the ability to grow into something truly significant, so our focus turned to wanting to build and realise that dream as quickly as possible, and that required additional capital.
Simply put, we would not be in the position we are today without it. Since then, we have undertaken additional capital raises and I am delighted that we have so many supportive shareholders who have joined the Gousto journey. I am particularly pleased that many of our employees are also owners in the business. That gives me added belief that while we’re only scratching the surface at the moment, I know we are starting to fulfil our mission of becoming the UK’s most loved way to eat dinner.
Is it correct you are formulating plans to float? What do you see as the benefits to this?
We have no near-term plans for any form of equity event. Looking ahead, our focus is on revolutionising the grocery market and we will keep all options on the table to help us do that.
How do you keep on top of your customer expectations and continue to deliver a great click to delivery experience?
Our mission keeps us laser-focused on providing the best possible experience for our customers. This is only made possible by the way we invest in and harness data and technology, with a tech team of over 200 people.
For example, we feel we are industry leaders in automation, having built our own algorithms to automate our fulfilment centres. These maximise the speed and accuracy of picking, enabling us to offer more recipe choice than anyone else in the market and meet growing daily order volumes.
We use data insight to offer a more personalised service for our customers, including through our artificial intelligence (AI) recommendation engine, which serves up a recommended menu unique to their individual preferences and tastes.
Offering a more sustainable meal is a key part of our mission and the customer experience. We use forecasting algorithms to reliably predict supply needs, which minimise food waste in our fulfilment centres. Exact portion sizes also means next to zero waste in the home. I’m particularly proud of the team’s achievements in cutting plastic in our boxes by 50% in 2020, and we’re working towards all of Gousto’s own branded packaging to be reusable, recyclable or compostable by the end of 2022.
Everything we do is driven by the customer. NPS is a key business metric that we obsess about. We track it at every stage of the customer journey to remove any pain points and elevate the moments of magic that make the Gousto experience so brilliant.
What would you say is the number one barrier you’re facing now to achieving your growth plans?
Without wishing to sound crass, I would say that it is time. We achieved some significant milestones in 2020 in terms of investing in capacity and technology to meet the accelerating demand. We doubled capacity in the year, investing in our existing fulfilment centre in Lincolnshire and adding a second automated factory in December.
We plan to double capacity again by the end of 2022 to meet this demand.
In addition, we made significant investment into our people, particularly within tech resource, as we doubled our total headcount from 500 to 1,000 with plans to reach 2,000 this year. So, we are investing and growing as quickly as time permits. That is really the only barrier we face!
Do you feel you’ll be able to sustain your ‘lockdown’ growth and can you tell us more about your plans for the near future?
Whilst lockdown accelerated our growth, with sales up 129% in 2020, we were growing rapidly pre-pandemic and didn’t see a drop off in sales when lockdown measures were eased during the summer and autumn in 2020.
Most people across the world shopped for groceries online for the first time, and we believe they are unlikely to go back to pushing trolleys and queuing.
We know they are looking for greater convenience, sustainable choices and healthier lifestyles. These aren’t trends driven by the pandemic, and Gousto is best placed to capitalise on these consumer trends which are driving grocery.
To keep up with the continued demand, we’re opening two new fulfilment centres over the next couple of years in Essex and Cheshire, and we’re also doubling our workforce this year alone to 2,000 people.
You have achieved unicorn status and in your last year of trading profitability – do you ever get time to celebrate these wins or is it always foot to the pedal as an entrepreneur?
We have an incredible team of people at Gousto, and both of these achievements are a real recognition of their enormous efforts, particularly over the last few years. It’s not about me celebrating these wins, it’s about me helping the team see the value and impact of their hard work and us celebrating that together.
We have some awesome Gousto traditions, such as Superday, which is a quarterly celebration of everyone’s hard work. The sessions are amazing and an opportunity to reflect and celebrate achievements from the prior quarter. We’ve kept them going throughout lockdown and I cannot wait to get back to the office to do them in person.
What inspires you to do what you do?
My ultimate motivation is to have a positive impact on people’s lives. Whether that’s creating a positive culture where employees can thrive and feel supported or building a product that makes people’s lives a little easier and more joyful, whilst having a positive impact on the environment.
The bigger and more successful that Gousto becomes, the more positive impact we can have. That’s my real inspiration.
What do you feel is coming next in your space?
Traditional grocery is being revolutionised by technology, just like other traditional supply chains have done. Think books (Amazon), music (Spotify), TV and Film (Netflix)… and this is just the beginning for our industry.
The three mega trends of convenience, sustainability and health are all driving consumer demand in grocery and triggering a seismic shift in the market.
Gousto is ideally placed to capitalise on this and we’re only scratching the surface of the opportunity, catering for just 0.2% of UK evening meals in 2020.
I’m incredibly excited about the journey our amazing team is embarking on, which will see our customers benefit as we fulfil our mission to become the most loved way to eat dinner.