“Free delivery, same day, no minimums—and we are there in your building every day,” said Dekel Valtzer, CEO and founder of Avo.
The deliveries, routed from a warehouse in Long Island City, are placed in designated racks in a building’s lobby for residents or office workers to pick up. The options include grocery staples, as well as some partnerships with local businesses.
JLL, which manages 55 million square feet of office space in the city, has begun piloting Avo in some of its buildings. The company’s venture investment in the delivery service was driven in part by a view that tech amenities will help give workers a reason to return to the office.
“Commercial real estate needs to differentiate itself now not just by its physical location and the physical amenities, but by having an overlay of digital amenities that stand out in the crowd,” said Raj Singh, managing partner at JLL Spark. “And it is even more important during the pandemic.”
Valtzer is a former professional tennis player and was an early executive at the publicly traded workplace software company Monday.com. He said the regular deliveries made by Avo make it possible to have no minimums and encourage people to order—they don’t have to feel they are initiating a new delivery, just tacking a few items onto an existing one for the building.
Online grocery sales jumped nearly 60% last year in response to the pandemic but, at $95 billion, still represented just 7% of total grocery spending, according to eMarketer. That means Instacart, Amazon, Walmart and a host of rapid-delivery services are fighting it out for what is still a relatively small share of the grocery market.
To Valtzer, Avo’s advantage is that it saves on customer acquisition costs by not marketing directly to consumers. The landlords it partners with promote Avo internally to their residents as an amenity in the building.
“We are spending almost $0 on Facebook, Google, Instagram, that is not how we market ourselves,” Valtzer said.
Avo got its start delivering baby products to parents in nurseries in Israel and launched its New York residential business late in 2019. Its earliest real estate partnership was in StuyTown, which signed on for the delivery service near the onset of the pandemic.
The company has raised $80 million in total investment and delivers to more than 100 buildings across the city. The company plans to expand to Chicago and Houston next.