True to its business concept, the Turkish 'instant delivery' juggernaut Getir rose quickly. Now that the fast-trading sector is in freefall, it is deteriorating just as quickly. On Monday, the company – once valued at nearly $12 billion – announced it would shut down its operations in the US, Britain and Europe to focus solely on its home market of Turkey.
The move puts a bitter end to the company's highly aggressive expansion strategy, which saw it raise billions of dollars to grow organically and also overcome a number of equally aggressive but struggling competitors to position itself as a market leader. It appears the closures will impact at least 6,000 jobs in the closing markets, but – according to the company – only 7% of sales. In addition to the closures, the company said it would receive a new injection of investment as a lifeline to extend the runway.
“This decision will allow Getir to focus its financial resources on Turkey,” a company statement said.
Getir is not alone in this area, raising money to stay afloat while simultaneously withdrawing from global plans. Reports about this surfaced earlier this month Blink, a former rival to Getir in Germany, is raising about $106 million, about a third of which has been secured so far. It comes as Flink is also consolidating its position. Coinciding with the fundraising leak, the company also apparently “liquidated” its activities in France.
More details, including financials, can be found below.
DismissedTo be clear, Getir only officially announced cuts of 1,500 in Britain in the brief announcement it sent to journalists: no details of jobs affected elsewhere. However, there were reports emerge in recent days it had started sending notices to 1,800 employees in Germany – the headquarters of Gorillas (which it acquired in late 2022). A source close to the company told us the number is closer to 1,100 (one figure may include contractors).
When Getir acquired FreshDirect in the US – just six months ago, in November 2023 – it hired 2,300 employees. Add those different figures together and you get about 6,000, although since Getir was already active in the US before that acquisition, it may have even more impact there. A year ago the company employed no fewer than 32,000 people.
The pandemic opportunity: The move is a grim chapter for the startup that was founded in 2015 and enjoyed great popularity in Turkey before the pandemic – Getir means 'bring' in Turkish. That led to aggressive investments and expansions that peaked during Covid-19, when consumers shopped less in-person — partly to minimize contagion, partly because in-person shopping became very challenging due to delivery issues, long lines to stagger entry and more.
Just as companies like Uber aggressively raised money to finance aggressive growth and competitiveness around the world, so did Getir: between its first outside investment in 2017 and September 2023, it raised more than $2.3 billion from some 36 investors, including Sequoia. , Tiger Global, Silver Lake, Mubadala, Goodwater, G Squared and A*.
The company also made a number of aggressive acquisitions of competitors to expand its position in the market – but mainly it was a consolidation that was intended not only as a power move, but also as a way for other struggling, cash-strapped players in the market to get out of the ruthless race. .
In addition to FreshDirect and Gorillas, Getir has also acquired activities in Spain, Italy and Great Britain at bargain prices. It was also reportedly interested in Zapp in the UK and Flink in Germany at one point, so it definitely saw itself as a consolidator in the troubled market. It was a strategy also followed by Getir's largest global competitor, GoPuff. Today's news leaves easier water for GoPuff in the US and Britain
It's a Turkish opportunity: This is a grim chapter, but not the last. Getir also announced it would raise new money to double its home market, a round led by Mubadala and G Squared.
Getir did not reveal who else participated, nor how much it raised, nor whether this was equity or debt. So it's hard to say what this means, other than the fact that the company gets a chance to focus on one market that has worked.
We've reached out to some previous investors, Sequoia and Tiger Global, to see if they would comment on whether they remain investors in the company, or whether they have cashed out.
Right now, the strategy for the bigger players in the instant grocery delivery market seems to be: accept that our international strategies weren't great ideas, and just focus on our core markets for now.
The writing on the wall: Getir, like its peers in the instant delivery market, has been struggling for some time. In May 2023, it cut 14% of its workforce and canceled large parts of its geographic expansion plans as it worked to right-scale the business ahead of more fundraising. Just weeks after, it withdrew from Spain, Italy and Portugal in July 2023. It was widely understood at the time that it was shutting down operations because those markets simply weren't thriving, but Getir was indeed trying to close a new round of financing. so reducing loss-making activities makes sense in that context.
Documents have been shared with JS showing that the company earned $3.3 billion for the 2023 calendar year, with the US and Europe (including the UK) accounting for around $1 billion of that during the year. (It's not clear from Getir's statement what the 7% figure refers to. We wonder.) The documents we saw late last year showed that the company was not Ebitda positive in any of its regions.
Big, bad news in the chaotic instant delivery market, but given the conditions of the risk market, the current economy and consumer behavior these days – yes, people are buying online, but they are also spending a lot of time outside and shopping as before – it is probably not the last.
