The kart dash for ultrafast delivery went into reverse this week, with the heavily flagged news that investors in Turkish-based specialist Getir would reach into their pockets once again, but this time to fund its exit from several European markets.
The grocery delivery app – at one point valued at an eye-watering $12 billion – has reportedly called on investors to inject yet more cash into the company to fund its departure from Germany, the U.K. and the Netherlands, having already deserted its Mediterranean markets.
And speculation has mounted that it could also seek to offload New York-based FreshDirect despite only buying the business at the end of 2023.
Getir has declined to make any comment but British broadcaster Sky News has reported that company shareholders had drawn up plans to potentially commit tens of millions of dollars more into Getir in the coming weeks, with thousands of jobs at risk amid market exits.
Leading investors, including the Abu Dhabi state-backed fund Mubadala, Sequoia Capital and Tiger Global were understood to have agreed to the new funding plan, which will add to the more than $2 billion Getir has already raised.
In a restructuring that will leave the once expansionist delivery provider to focus on its domestic Turkish market, Getir’s operations in the U.K., Germany and the Netherlands are all expected to be shut down, with discussions ongoing about the fate of its FreshDirect arm in the U.S., which it only acquired a few months ago.
Getir And Rapid Delivery
Its latest round of funding would cover the cost of exiting the three markets in Europe, as well as providing additional capital to invest in the Turkish business.
Getir rode the wave of booming demand for fast and ultrafast delivery services buoyed by the pandemic lockdowns, growing rapidly along with rivals like GoPuff, U.S. giant DoorDash and Deliveroo.
Yet rumors about the sustainability of the business have swirled for around a year and remained even as the company completed the acquisition of FreshDirect, the U.S.-based online grocery previously owned by Ahold Delhaize, in December of last year.
Getir, founded in 2015, aims to deliver grocery orders within 10-15 minutes and made its U.S. debut in Chicago in November 2021 and then expanded to New York City and Boston. However, last year Getir consolidated its international market coverage and announced a circa 11% head count cut, raising questions over the future of ultrafast delivery specifically.
Getir’s rise was really jolted a year ago when there were claims, denied by Getir, that a fundraiser of $500 million had slashed its valuation from a peak of $12 billion in 2022 to just $6.5 billion.
In July, Getir announced that it would exit Italy, Portugal and Spain to focus on what it described as its more profitable and sustainable growth markets, notably the U.S., the U.K., Germany and its domestic Turkish market, which collectively accounted for 96% of its global business at the time.
Getir Business Sustainability
Getir has previously denied that any form of insolvency was on the cards for the group or its subsidiaries and is understood to have drafted in restructuring advisers, while Mubadala is being advised by AlixPartners.
Many of its rivals have already gone bust, while others have been swallowed up as part of a desperate wave of consolidation. Getir itself bought Gorillas in a $1.2 billion stock-based deal that closed in December 2022 but has been since criticized for maintaining both brands in Germany, instead of bringing them under an umbrella brand.
Key among its rivals is DoorDash, which reported revenues of $2.3 billion last year, up 26.7% year on year and topping analyst expectations as the company reported 574 million service requests, up 22.9%. Its first quarter update is due May 1 and the stock is currently up over 30% in the year-to-date at around $1.27 per share.
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