The German flash delivery service Gorillas is taken over by its Turkish competitor Getir. The deal was signed on Friday, sources confirm NRC. Both companies had been in talks about a takeover for weeks. According to Financial Times Getir pays 1.2 billion dollars (1.1 billion euros) for Gorillas.
Whether the Gorillas brand will also disappear and what will happen to the fifteen thousand employees of Gorillas, including a thousand in the Netherlands, is still unknown. Gorillas is active in twelve Dutch cities, Getir in sixteen cities.
Super-fast shopping services have been in fierce competition for the past two years. With Flink (in 36 cities) and the Getir-Gorillas combination, there will soon be two flash delivery companies left in the Netherlands. Another competitor, the British Zapp, announced in July that it would leave the Netherlands.
The reason for this was, among other things, the great resistance that flash delivery drivers receive from numerous Dutch municipalities, which are trying to keep delivery people on their electric bicycles out of city centers. For example, Rotterdam and Amsterdam decided that flash delivery drivers are no longer allowed to open new branches of distribution centers.
Valuation dropped sharply
According to those involved, Gorillas shareholders – including American venture capitalist Coatue and German meal delivery company Delivery Hero – are paid partly in cash and partly in Getir shares. One of the shareholders is Gorillas CEO Kagan Sümer (35), who owns approximately 12 percent of the company. As part of the acquisition, he is leaving the company he founded in May 2020.
Exactly how much Sümer gets for his shares is unclear. The fact is that the valuation of both Gorillas and Getir has fallen sharply in recent months as a result of the economic headwind that has hit loss-making tech companies in particular hard. Gorillas and Getir are currently worth a combined $10 billion, according to the Financial Times. Nine months ago it was one and a half times as much.
Investors have poured billions into flash delivery companies over the past two years, in the belief that this industry would finally break through after the corona pandemic. One of those investors is supermarket chain Jumbo, which earlier this year took a financial interest in Gorillas through Mississippi Ventures, the investment vehicle of the Jumbo family Van Eerd, and supplies products for Gorillas warehouses. It is not yet clear what will happen to the collaboration after the takeover.
The low interest rates made it relatively easy for the flash companies to get money to finance their expansion plans for a long time. That period is over. The war in Ukraine and rising energy and food prices have created a new economic reality. As a result, venture capitalists have turned away from the risky flash delivery companies with their shaky revenue model, where the companies burn millions in the race to become the biggest. Both Gorillas and Getir have laid off staff and closed branches in recent months to cut costs.
Following Gorillas, Flink and Getir, other companies have also started experimenting with fast delivery. For example, Thuisbezorgd and Blokker are conducting a trial in Rotterdam to have products from the Blokker range delivered at home within two hours. Albert Heijn is also working with Thuisbezorgd meal delivery staff for a flash delivery service in the center of Amsterdam.
Also read an interview with Getir CEO Nazim Salur (2021): “You think burning millions a week is a lot. Not me’
Expensive industry
With the acquisition of Gorillas, one of the fastest growing companies in Europe comes to an abrupt end. Gorillas was founded in May 2020 by Sümer and a group of friends in Berlin and has grown into a company of over 15,000 employees, operating in 180 distribution centers across 44 European cities.
In the early days, Sümer converted his own living room into a distribution center, to deliver from there within ten minutes to customers who ordered groceries via app. Due to the lockdowns during the corona pandemic, the demand for flash delivery boomed and Sümer attracted hundreds of millions in investment money. The rapid rise of Gorillas forced competitor Getir, which has been around since 2015 and was only active in Istanbul for the first few years, to enter the European battle.
Speed delivery is an expensive industry, where the companies incur high costs with their permanent delivery drivers, supplies and distribution centers to serve customers. Meanwhile, the flash delivery companies compete with each other with high discounts, which further increase the losses.
To finance that growth, Gorillas raised 1.3 billion dollars (1.2 billion euros) in investment money over the past 2.5 years. For Getir, it was even more: $1.8 billion. Despite the fact that the losses of the flash delivery companies ran into the millions per week, that was “money well spent”, Getir CEO Nazim Salur said to him last year. NRC. “If you end up as a winner in this game, it’s about billions.”