Getir, a Turkish delivery service, has acquired German rival Gorillas in a $1.2 billion merger that would combine two of the last businesses in Europe offering groceries in minutes.
The pricing was revealed on Twitter on Friday by Serkan Borancili, who formed the Getir firm in Istanbul in 2015. He also claimed that the merged business was now more substantial.
The sale price is significantly lower than Gorillas’ $2.1 billion value in its last financing round in late 2021, a hint that the industry has lost favor as businesses struggle to become profitable, collaborate, or dissolve.
In a statement, the corporation said that the action “underlines that Getir is spearheading the consolidation.”
Requests for comment from gorillas were not immediately answered. The more significant business will fight in Europe’s rapid commerce market against German firm Flink, American firm GoPuff, as well as larger meal delivery companies that also carry groceries.
The merged group was valued at $10 billion, according to The Financial Times (FT), which cited persons familiar with the acquisition.
Getir completed a $768 million investment round earlier this year, backed by state investor Mubadala of Abu Dhabi, which gave the business a $12 billion valuation.
The FT also stated that due to the significant overlap between the two businesses’ networks of small urban warehouses, employment layoffs were anticipated as part of the agreement. With the support of Sequoia and Tiger Global in the form of venture money, Getir was one of the first businesses to test the fast commerce model.
Getir plan to raise further cash
One of several businesses that seized onto the COVID-19 lockdowns and ran with the concept was Gorillas, created in 2020 with the tagline “faster than you,” opening operations in dozens of European countries.
Sales of the company increased in 2021, but early in 2022, it struggled to secure cash and had to lay off 300 workers, reducing the size of its administrative staff by half. So before starting discussions with Getir, it moved its attention from fast expansion to the goal of turning a profit by 2023.
According to the FT story, Getir itself plans to raise further cash at the start of next year.
In order to get pasta, milk, crisps, and other commodities to clients quickly, businesses must pay couriers and hire space for distribution hubs in city centers, which comes at a high cost.
Analysts claim that the industry in Europe faces extra difficulties as consumers decrease expenses in the face of rising costs of living.
