Companies like Getir and Gorillas promise to deliver items to shoppers’ doorsteps in as little as 10 minutes.
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Grocery delivery startup Getir announced on Monday that it will exit international markets including the United Kingdom, Germany, the Netherlands and the United States, marking a major setback for the once-hyped online grocery industry.
The Istanbul, Turkey-based company said in a statement that it was exiting the U.S. and European markets and would now refocus its financial resources in Turkey.
The company said it had raised a new round of investment led by Abu Dhabi sovereign wealth fund Mubadala and venture capital firm G Squared “to strengthen its competitive position in Turkey’s core food and grocery delivery business.”
Getir says 7% of its revenue comes from the UK, Germany, the Netherlands and the US
“Getir would like to express its sincere gratitude to all its employees in the UK, Germany, the Netherlands and the United States for their dedication and hard work,” the company said.
Pandemic grocery hype fades
Getir was one of the most hyped online grocery delivery companies during the height of the Covid-19 pandemic in 2020 and 2021, when people around the world turned to online services for shopping.
The company was founded in 2015 and has raised $1.8 billion in funding to date. Getir raised $768 million in 2022 and was valued at $11.8 billion.
Getir’s valuation has since plummeted, with billions of dollars reportedly wiped off the company’s market value.
Getir raised funding from major backers including Mubadala, G Squared and former Sequoia Capital partner Michael Moritz, valuing it at $2.5 billion, according to a September 2023 report British “Financial Times” reportciting unnamed sources familiar with the matter.
This would represent a significant discount of 79% to Getir’s previously disclosed valuation. CNBC could not independently verify the FT report.
Struggle space
Getir’s bright purple and yellow branding has become a common sight on mopeds, which deliver groceries on demand in bustling cities like London and New York.
The business of Getir and others like it relies on a model in which groceries are packaged in local so-called “dark stores,” which are located in large cities near densely populated areas of the city.
Groceries will be packed by Getir store staff and then delivered within minutes by its fleet of drivers. Getir claims delivery time is only 10 minutes.
Gorillas, another grocery delivery company with a similar model to Getir, faced financial difficulties in 2022, with high interest rates and soaring inflation putting pressure on its business.The brand is It was acquired by Getir in December 2022 for US$1.2 billion.
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