Table of Contents
Most European founders dream of competing with Silicon Valley giants. Oscar Pierre actually did it, building Glovo from a "bunch of kids from Barcelona" into a €2.3 billion marketplace that outmaneuvered Uber Eats and Deliveroo across multiple markets. His journey reveals the brutal realities of marketplace dynamics, the power of local execution, and why European entrepreneurs might have more advantages than they realize.
Key Takeaways
- Glovo raised their first €100K at a €280K pre-money valuation, with 30% of the company sold to get started
- The McDonald's exclusivity deal in 2018 saved the company from certain death and became their playbook for international expansion
- European VCs systematically underestimated Glovo's potential, forcing them to nearly die three times before finding alternative funding sources
- Marketplace businesses require 3-4 year payback periods for restaurant exclusivity deals and 5-10 million euros to launch new markets profitably
- Culture deteriorates predictably at around 1,000 employees unless founders actively maintain high-performance standards
- Local execution beats global resources - Glovo won Spain against Uber by dedicating all engineers to McDonald's requirements
- Quick commerce advertising could generate 5% of GMV in pure margin revenue, currently at 2-3% penetration
- Regulation in Europe creates uneven playing fields where local companies face criminal prosecution while US competitors operate freely
From Aerospace Dreams to Uber for Errands
Oscar Pierre's entrepreneurial journey began with disillusionment. Fresh out of aerospace engineering school, he landed his dream job at Airbus in France, only to realize corporate life wasn't for him. The inspiration came during his studies in Atlanta, where he witnessed Uber's transformative impact on campus life.
"I saw how Uber launched in Atlanta and how big it scaled and the impact it had on all the students," Pierre recalls. "I said why don't we build the Uber for errands?" The original concept was simple: an app where anyone could request any errand - go to this store, pick up this item, bring it to me.
The pivot to food delivery happened organically through customer behavior. "We started seeing people ordering McDonald's, they ordered Big Macs, and I was like holy shit, why Big Macs?" This unexpected usage pattern revealed that food delivery remained massively underserved, with existing platforms like Just Eat only aggregating restaurants that handled their own delivery.
Pierre's insight was that unlocking "all the supply of the city" required a marketplace that also provided delivery infrastructure, not just restaurant aggregation. This realization would become the foundation for competing against billion-dollar global competitors.
The Brutal Reality of Early-Stage European Funding
Glovo's fundraising story reads like a masterclass in startup survival. Their first round exemplifies how different European early-stage investing was compared to Silicon Valley norms. "The first round was valued at €280K pre-money and we raised €100K," Pierre explains. "With that, the first business plan and deck took us to profitability and to a sustainable company."
The €380K post-money valuation meant investors bought roughly 30% of the company for €100K - terms that would make modern founders cringe but provided just enough capital to hire their first CTO and rebuild the app from scratch.
European VCs consistently underestimated Glovo's potential. "All the European VCs or most of them passed on us," Pierre notes. "Nobody believed in our story - a bunch of kids from Barcelona beating the Deliveroos and Ubers of the world." The systematic rejection forced creative solutions and near-death experiences that became defining characteristics of the company's culture.
The funding challenges weren't just about money - they reflected deeper cultural differences in European venture capital. "Most of the people that I found had never built things, so it was really hard to connect," Pierre explains. "Building a company is such a roller coaster that if you don't have people that are used to this roller coaster, they add so much pressure."
The McDonald's Deal That Changed Everything
In 2018, McDonald's global CEO sent a message to all countries announcing exclusive partnership with Uber Eats for delivery. For Glovo, competing against Uber, Deliveroo, and Just Eat in Spain, this represented an existential threat. "We were like, we're screwed. If Uber gets this deal and can start delivering McDonald's for one or two years exclusively, we shut down the company for sure."
Rather than accept defeat, Pierre traveled to Madrid "at least 40 times" to meet with Suzette, the McDonald's Spain decision maker. The persistence paid off when she agreed to break global exclusivity and give Glovo a test. "For some reason she trusted us more than Uber Eats and gave us that test."
The test became a life-or-death moment for the 20-person team. "Everybody knew that was life or death, so we were all in. We had all engineers building things that McDonald's wanted, putting the McDonald's logo everywhere, and any request they asked us, we said yes." This local dedication created advantages that Uber's San Francisco-based team couldn't match.
The McDonald's partnership's impact was transformational. "It was massive - the power of that brand, how many new customers it brings." At one point, 70% of Glovo's volume in Spain came from McDonald's, but cohort analysis showed customers quickly diversified to other restaurants and services.
The success created a replicable playbook. When McDonald's Italy saw the Spanish results, they also gave Glovo exclusivity for two years. This pattern of mega-brand partnerships became central to Glovo's international expansion strategy.
Marketplace Dynamics and the Economics of Scale
Glovo's business model illustrates the complex economics of three-sided marketplaces. Scale effects operate on multiple dimensions simultaneously, creating compounding advantages for market leaders.
Logistics optimization becomes the most visible benefit. "We very fast become the largest logistics fleet in any city where we operate, which means we have the cheapest cost to serve, to move something from point A to point B." Higher courier density means shorter pickup times and more efficient routing.
Data advantages multiply over time. "Delivering food is so complex because every single second matters. You cannot send the courier late to pick up the order because the food is going to get cold. You cannot send it very early because that's seconds you're paying the courier." The platform learns restaurant preparation times for different dishes, courier travel patterns, and weather impacts.
Revenue diversification provides sustainable unit economics. Early marketplace revenue comes from customer delivery fees, but mature markets shift toward merchant revenue. "You start moving the revenue stream to what we call the merchant - the restaurants, the stores, the groceries - so you can start making the service cheaper and cheaper for the customer."
The economics require significant upfront investment. Launching new markets costs €5-10 million and takes 2-3 years to reach profitability. Restaurant exclusivity deals require 3-4 year payback periods, representing substantial capital commitments that only scale players can sustain.
International Expansion: The Time-Sensitive Land Grab
Glovo's expansion strategy prioritized speed over perfection, recognizing that marketplace businesses create winner-take-all dynamics within geographic markets. "In our industry, you really need a lot of market share. You need to become the leader," Pierre explains. Being number two is possible but requires maintaining "very relevant" market position.
The company's natural expansion started domestically - Barcelona to Madrid to Valencia - before international moves to Paris and Milan. Paris failed because "we were launching maybe two or three years after Deliveroo and Uber launched, so we never gained the scale and leadership to be a sustainable business."
This failure taught crucial lessons about market timing. When McDonald's success validated their model in Spain and Italy, Glovo accelerated international expansion to capture first-mover advantages. "When we got that, we were like okay, let's look at the map of the world. There's so many countries where nobody has disrupted them yet."
Latin America became their primary focus due to cultural and language advantages for Spanish founders. "As Spaniards, we look to LATAM. I think Spanish entrepreneurs - it's a small secret we have there - but it's actually pretty natural for us to expand into LATAM, which is a massive market."
The Peru launch validated their global potential. "When we launched Lima and I saw the first week it was flying," Pierre recalls. "It was the same as very similar to what we saw in Milan and Barcelona and Madrid - frequency of orders, AOV, restaurant signups, driver signups. The three sides of the marketplace were working."
The Brazil Disaster and Lessons in Market Assessment
Not every international expansion succeeded. Brazil became Glovo's biggest failure, resulting in €30-40 million in losses before shutdown after just one year. The mistake stemmed from incorrect competitive analysis.
"We looked at what was there in the market - there was a company very successful called iFood - and we thought iFood was very similar to Just Eat," Pierre explains. "Whenever we saw Just Eat in any market, we launched because we knew we could compete against them and offer a better service."
The reality proved different. iFood had comprehensive restaurant coverage and strong service quality, creating platform stickiness that made customer acquisition prohibitively expensive. "These platforms are really sticky. If a high percentage of population is already using iFood, you need to spend a lot of money in vouchers to convince customers to switch."
Voucher-based acquisition destroys unit economics in low-margin businesses. "Anytime you go into a voucher, you go into negative economics," Pierre notes. The combination of strong incumbent and thin margins made Brazil unwinnable despite the large market size.
Shutting down Brazil after one year required overcoming founder ego. "Shutting down things is a super important skill for a founder because it's an ego thing. You have to go against what you have previously told the board, the investors, the employees." The decision affected 100 employees who "were doing things well - just the market was too tough."
The Culture Crisis at 1,000 Employees
Glovo's rapid growth created predictable cultural challenges that Pierre handled poorly before course-correcting. "When we got to around 1,000 employees, that's when we messed up the culture, and it was all my fault," he admits.
The problem began with Pierre's communication style evolution. During hypergrowth, natural intensity and stretch goals maintained high-performance culture. But as growth moderated to 30% year-over-year, Pierre started "getting scared of some part of our team reacting to how I said certain things."
"I started being a bit of a politician," Pierre explains. "Politicians say things in a way that a very large percentage of the population will like it." This approach diluted the company's high-performance standards and sent mixed signals about expectations.
The wake-up call came at a Christmas party when Pierre overheard an engineer saying he'd rejected a competing offer because "they work really hard there." Pierre realized: "It's not only that the intensity starts going down of the company, it's that you're losing the hardworking people to another company that is achieving to set and keep that intensity."
The solution required top-down realignment. "Start from the top, start aligning the top leaders, firing those that were not aligned. You realize that some of them didn't want to go back to the Glovo of the beginnings." Pierre sent direct emails to the entire company about returning to founding culture values.
The transition was painful. "Even if it's 10-20% [who disagree], it's very loud. You get a year of noise and really bad energy, a lot of toxicity." But the alternative - accepting mediocrity - would have been worse for long-term success.
Managing Through Seven Years of Fundraising Hell
Glovo's fundraising frequency reveals the capital intensity required for marketplace dominance. "For seven years, we raised a round every 9 months," Pierre notes, compared to the typical 18-month cycle. This pace reflected both the competitive pressure and the company's chronic undercapitalization.
The short runway resulted from strategic necessity rather than poor planning. "The stakes kept getting higher, so the industry kept getting more and more irrational, more and more growth. We were still at negative unit economics, so things were going really well, but the burn kept scaling."
Every funding round became life-or-death. "We either over-invest and we shorten our runway, or Uber Eats and Deliveroo will kill us in all of our markets. So it was a life-or-death decision all the time, and we had to overspend every single time."
The psychological pressure was enormous. "For seven years, I was checking how much cash we had in the bank every single day, and it keeps going down every single day." At peak burn, Glovo was spending €30 million per month - €1 million per day.
Near-death experiences became routine. In one instance, Pierre received a call from the lead investor on December 23rd saying they were passing on the round. "That was a really bad Christmas," he recalls. Emergency internal rounds provided temporary runway to find alternative investors.
The Rakuten Rescue and Random Encounters
One of Glovo's most critical funding rounds came from an unexpected source: a chance encounter at an FC Barcelona event. Hiroshi "Mickey" Mikitani, founder of Rakuten (Japan's Amazon), was attending as a sponsor.
"For some reason he liked the company. He had seen the backpacks in the streets of the couriers, and he decided to lead the round," Pierre explains. Mikitani invested approximately €15 million, providing crucial capital when traditional VCs had passed.
The Rakuten connection illustrated how global networks could provide alternatives to European VC limitations. It also demonstrated the importance of brand visibility - Glovo's courier backpacks served as inadvertent marketing that caught a potential investor's attention.
Even after securing Rakuten as lead, challenges continued. During McDonald's contract negotiations, one VC demanded the contract be signed before finalizing investment. "I was there negotiating with McDonald's. At some point I had to tell McDonald's, 'Hey look, we need this contract, otherwise we're going to have to shut down operations.'"
The €2.3 Billion Exit to Delivery Hero
After seven years of constant fundraising stress, Pierre reached his emotional limit. Following their Series F, he looked at the business plan with his CFO and realized they would need to start fundraising for the next round immediately. "We looked at each other and were like, 'I can't do another one emotionally.'"
The options were IPO or acquisition. With €1 million daily burn, IPO wasn't viable for an unprofitable company. They explored acquisition options, with Delivery Hero emerging as the best bidder at €2.3 billion in all-stock transaction completed December 31st, 2021.
Delivery Hero's operating model aligned with Glovo's goals. "Delivery Hero's operating model is to empower local brands. They have Talabat in Middle East, which recently IPO'd, they have PedidosYa in South America, they have Glovo. They empower them with a lot of technology and with capital when needed."
The structure allowed Glovo to maintain operational independence while gaining access to global technology platforms and capital for continued expansion. For Pierre, it represented mission completion: "returning the money and making sure that Glovo would keep existing, keep delivering to customers, keep serving riders and restaurants."
The Advertising Revolution in Quick Commerce
As Glovo matured, advertising emerged as a crucial revenue stream with superior unit economics. "Out of every €100 of GMV, we will be able to generate at least €5 of advertising money, which are almost full margin," Pierre explains. Current penetration sits at 2-3%, suggesting substantial upside.
The advertising model leverages purchase intent data. "Every time someone opens Glovo, they open it with an intention of purchase. For any brand, any restaurant, they want to be there. It's so efficient advertising." When customers search for shampoo, shampoo brands pay premium rates to appear first.
Growth drivers include product development and merchant adoption. "We still only have a fraction of all the merchants that we work with using our advertising products, so it's a matter of penetration and also improving the advertising engine."
The advertising business could fundamentally change marketplace unit economics, providing high-margin revenue that subsidizes delivery costs and enables more competitive consumer pricing.
Regulatory Challenges and European Disadvantages
Glovo's Spanish operations face severe regulatory scrutiny that illustrates broader challenges for European tech companies. Pierre currently faces criminal prosecution with potential six-year prison sentence for operating with freelancer courier model.
"It's so extreme that I'm now in a criminal process. The prosecutor accused me with six years of prison for running with a freelancers model, which is something that has been validated by judges in Spain up to 14 times," Pierre explains.
The regulatory enforcement appears unevenly applied. "We were not playing a fair game against our competitors. For some reason, we were the only company that the administration went against in Spain, and our competitors who are from the US - Uber Eats - they're still not being accused."
This asymmetry creates competitive disadvantages for European companies facing local regulatory pressure while US competitors operate with different standards. The complexity extends across Glovo's 23 markets, requiring public affairs teams in every country.
Pierre remains pessimistic about regulatory trends. "I'm very optimistic in life, but I just don't see the incentives so that this trend changes. In EU regulations getting easier for the next wave of entrepreneurs, I'm not super optimistic."
Lessons for European Entrepreneurs
Despite regulatory challenges, Pierre strongly advocates for European entrepreneurship. "I strongly disagree" with advice to move to Silicon Valley, he states. "From Barcelona, where there was a very small ecosystem of tech and tech talent, we were able to build top-notch technology. I don't think our technology had anything to envy our American competitors."
The key advantage European entrepreneurs possess is work ethic and local execution capability. "What no other competitor can beat us at is the culture of working really hard, and that's what allows us to win the deal of McDonald's or to beat big competitors in any single market."
Scale advantages exist beyond Silicon Valley. "I don't think any large competitor is now bigger than us in any of the markets where we operate, and this is just daily local execution and mega obsession on details."
Pierre's advice focuses on ambition rather than location. "I wish somebody had told me to have more ambition when I started because I was, for at least the first three or four years, I didn't fully believe I could do it. There were no big examples in Europe or at least in Spain."
For maintaining high-performance culture, he emphasizes transparency and standards. "Keep speaking with full transparency all the time, doesn't matter how many people you have in front, and doesn't matter if a fraction of them get upset."
The Future of On-Demand Commerce
Pierre envisions Glovo as "the future of online commerce," extending far beyond food delivery. The platform handles "groceries, pharmacy, shops, anything that can fit into a rider's backpack," targeting the broader on-demand economy.
The grocery opportunity alone is massive. "In Spain, the groceries offline market is €120 billion, out of which only 2% is online. We're fully convinced that this 2% will turn into 20-30%." Glovo believes they can capture "at least half" of this transition.
The vision extends to universal on-demand fulfillment. "When people have this first experience of ordering a MacBook charger and getting it in 30 minutes, I think that's going to be the future. Everything will be on demand and everything will be delivered in 30 minutes."
This transformation requires sophisticated technology that traditional retailers cannot develop independently. "To make it profitable without overcharging the customer, you need so much technology that we now see all retailers, all grocers, they're relying on us to go into the online business because their online business is not working."
Pierre's journey from €280K pre-money valuation to €2.3 billion exit demonstrates that European entrepreneurs can build globally competitive technology companies through superior execution, local market understanding, and relentless focus on unit economics. The path requires extraordinary persistence through funding challenges and regulatory complexity, but the rewards - both financial and societal impact - justify the struggle.
