Client Need

A Europe-based hedge fund initiated a due diligence exercise on an online grocery and food delivery service company. This case study delves into the specific parameters guiding the due diligence process. It sheds light on the challenges faced by the hedge fund and the strategic considerations underlying their assessment of the company's potential for growth and strategic alignment. Due diligence parameters included:

• Market assessment and commercial due diligence to understand the product-portfolio level targeting of the company under consideration
• Top-selling products in terms of volume and pricing (margins) and their sustainability levels
• Competitor landscape and its impact on pricing and margins
• Current valuation estimates vis-a-vis future growth estimates

Knowledge Ridge Solution

Knowledge Ridge, having provided support across the entire investment lifecycle for many clients, quickly understood the highly quantitative nature of the requirement and offered in-person meetings and long-term engagements with select experts to address the study objective. Some of the key experts on-boarded were:

Former Head of Online Retail at an e-commerce giant having groceries as one of their key offerings. The expert was instrumental in sharing deep insights on sub-categories having the highest turnover rate, categories to be targeted to garner the highest margins, marketing strategies employed by significant players, and finally, the product pricing models

Former VP of Merchandising & New Product Introduction at a leading online grocery and food delivery company. The expert provided specific insights into scenario generation, growth prospects, sustainable revenue streams, and supply chain and logistics aspects, including fleet management

Independent consultant with deep expertise in valuing e-commerce companies to help arrive at the best measure of company fair value as well as capital allocation strategy for our client

Knowledge Ridge Impact

Knowledge Ridge shortlisted ten experts from the online-based grocery and food delivery service company. The client selected seven experts and conducted hourly phone consultations with each of them. The client gained first-hand perspectives and actionable insights into the company's due diligence parameters. Some of the selected experts shared their perspectives on market assessment and commercial due diligence to understand the product-portfolio level targeting of the company under consideration. Other selected experts shared their perspectives on top-selling products in terms of volume and pricing, the competitor landscape, and its impact on pricing.