Target Information

La Cocos, founded in 2014 by Romanian entrepreneurs Iulian and Gianina Nica, is a discount retailer currently operating three locations in Ploiesti and Bucharest. The company employs a unique business strategy that emphasizes an efficient product assortment at competitive prices. Over the period from 2018 to 2022, La Cocos experienced an impressive annual sales growth rate of 24%, surpassing the leading competitors in the Romanian grocery retail sector. In 2023, La Cocos reported revenues totaling €200 million and offers around 10,000 Stock Keeping Units (SKUs), catering to both B2C customers and small B2B businesses.

Industry Overview

The grocery retail industry in Romania is undergoing significant transformation, especially within the discount sector, which is the most dynamic segment. This category is characterized by a growing consumer preference for budget-friendly shopping options, a trend exacerbated by economic factors driving consumers toward value-oriented retail formats. As a result, discount retailers like La Cocos enjoy substantial growth potential as they appeal to price-sensitive shoppers.

Moreover, the rise of e-commerce and shifting consumer habits have prompted traditional retailers to adapt and innovate. A significant number of consumers in Romania now favor the convenience and value offered by discount retailers, creating a fertile environment for the expansion of La Cocos. The proximity of stores to underserved areas further enhances operational efficiency, making La Cocos well-positioned to capture a larger market share.

Industry experts predict continued robust growth for the discount retail market in Romania, driven by an economy progressively recovering post-pandemic. As consumers seek cost-effective alternatives amid rising costs of living, discount retailers are expected to thrive. The partnership with EBRD, CEECAT Capital, and Morphosis Capital will play a pivotal role in enabling La Cocos to capitalize on these trends and expand its footprint across the nation.

Rationale Behind the Deal

The primary objective of this strategic investment by EBRD, CEECAT Capital, and Morphosis Capital is to facilitate the rapid national expansion of La Cocos. The founders recognized that substantial investment is required to achieve their growth ambitions, projecting a need for a network expansion that could otherwise take over 15 years without support. This collaboration enables La Cocos to harness the expertise and financial backing of experienced partners, which is essential for reinforcing its position as a leader in Romania's food retail market.

Furthermore, each investor brings unique strengths to this consortium. EBRD delivers an extensive understanding of the food retail landscape, CEECAT Capital offers regional insights, and Morphosis Capital contributes local expertise, which collectively enhances La Cocos's growth trajectory and operational effectiveness.

Investor Information

The consortium behind this deal consists of three significant entities: EBRD, CEECAT Capital, and Morphosis Capital. EBRD is a renowned multilateral bank that aims to foster private sector growth in diverse economies across three continents. The bank has made substantial investments in Romania, with over €11 billion allocated to various projects. CEECAT Capital operates as a private equity firm focused on small and mid-market companies, advocating for socially responsible growth while working collaboratively with management teams to realize their visions.

Morphosis Capital, though established more recently in 2018, has quickly made its mark as a private equity fund dedicated to transforming Romanian SMEs into regional leaders. By investing in industries with high growth potential, Morphosis has successfully backed numerous companies, showcasing its commitment to enhancing the local economy.

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The investment in La Cocos presents a promising opportunity for all parties involved. The company's innovative business model positions it well within the increasingly competitive retail landscape of Romania. The ability to offer low operational costs and a curated product lineup feeds into the growing consumer preference for discount shopping. As the collaboration gathers momentum, the substantial resources from established partners will likely accelerate La Cocos's growth trajectory in the coming years.

Additionally, the focus on expanding the store network aligns with the prevailing market trend of increasing demand for accessible and affordable grocery options. By strategically positioning new locations in underserved areas, La Cocos stands to gain market share and solidify its leadership position.

While expansion comes with inherent risks, the support and expertise from EBRD, CEECAT Capital, and Morphosis Capital significantly mitigate these concerns. Their combined experience and knowledge of the Romanian market provide a robust foundation for La Cocos's ambitions. Therefore, this investment could indeed be a strategic win, supporting a growth phase that solidifies La Cocos as a key player in Romania's retail sector.

In conclusion, this partnership not only aims for financial success but promotes local business growth and development. As La Cocos leverages its strong backing and strategic insights from this collaboration, the potential for long-term sustainability and market leadership appears highly promising.

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