True to its business concept, Turkish “instant delivery” giant Getil has risen rapidly. Currently, the quick commerce industry is in freefall and is plummeting just as fast. On Monday, the company, once worth nearly $12 billion, announced it would cease operations in the U.S., U.K. and Europe to focus solely on its home market of Turkey.
The move marks the company's extraordinary bid to raise billions of dollars to grow organically and acquire a number of similarly aggressive but struggling competitors to establish itself as a market leader. This would bring a bitter end to an aggressive expansion strategy. The closures are expected to impact at least 6,000 jobs across the closed markets, but the company said the impact would only account for 7% of its sales. In addition to the closure, the company announced new investments to extend the runway as a lifeline.
“This decision will enable Getil to focus its funds in Turkey,” the company said in a statement. Please see below for details including financial status.
Job cuts: To be clear, Getir only officially announced 1,500 job cuts in the UK in a short announcement sent to journalists, and did not share any affected jobs in other regions. There are no details about. However, in recent days, reports have surfaced that the company has begun sending notices to 1,800 employees at its Gorilla headquarters in Germany (which it will acquire in late 2022). People close to the company say the number is closer to 1,100 (that number could include contractors).
Meanwhile, when Getir acquired FreshDirect in the US (just six months ago, in November 2023), the company hired 2,300 employees. These various numbers add up to about 6,000 cases, but because Getir was already active in the U.S. prior to the acquisition, it could be affected by many more. A year ago, the company had 32,000 employees.
Pandemic opportunity: The move marks a tough chapter for the startup, which was founded in 2015 and had attracted a lot of attention in Turkey even before the pandemic — Getir means “to bring” in Turkish. That led to aggressive investment and expansion, which peaked during the coronavirus pandemic when consumers were less likely to shop in person. This was partly to minimize the risk of infection, but also because in-person shopping has become extremely difficult due to supply issues and long lines to stagger entry.
Just as ride-hailing companies like Uber have aggressively raised capital to fund aggressive growth and competition around the world, so has Gettier. From its first outside investment in 2017 to his September 2023, the company has raised more than $2.3 billion from about 36 investors, including Sequoia. , Tiger Global, Silver Lake, Mubadala, Goodwater, G Squared, A*.
The company also aggressively acquired competitors to improve its market position. What's notable, however, is that this consolidation was not just a power move, but a way for other struggling and cash-strapped players in the market to escape intense competition. .
In addition to FreshDirect and Gorillas, Getir has taken over operations in Spain, Italy, and the United Kingdom on the cheap. It is also said that at one time it was interested in Britain's Zapp and Germany's Flink, so there is no doubt that it sees itself as a consolidator in a difficult market. This was a strategy also adopted by GoPuff, Getir's biggest global competitor.Today's news makes GoPuff more readily available in the US and UK
Turkey's Window of Opportunity: This is a tough chapter, but not the final one. Getir also announced new funding to double its domestic market in a round led by Mubadala and G Squared.
Getir hasn't disclosed who else is participating, how much it's raised, or whether it's equity or debt, so this gives the company some runway and a chance to focus on one market that's doing well. It's hard to say what it means beyond giving.
We reached out to some of our previous investors, Sequoia and Tiger Global, for comment on whether they continue to invest in the company or are taking out money.
The writing on the wall: Getir, like its peers in the instant delivery market, has been struggling for some time. In May 2023, the company cut 14% of its workforce and canceled most of its geographic expansion plans in a bid to right-size its operations ahead of raising further capital. Just weeks later, the company pulled out of Spain, Italy, and Portugal in July 2023. At the time, it was well understood that it was simply because those markets weren't thriving, and in fact Getir was close to completing another round of funding. , investors indicated that they would not invest unless it reduced costs.
According to documents shared with TechCrunch, the company made $3.3 billion in calendar year 2023, with the US and Europe (including the UK) accounting for about $1 billion of that during the year. (It's not clear from Getir's statement what the 7% figure is related to. We're asking.) Documents we've seen show that as of the end of last year, the company had Even in the region he was not Ebitda positive.
Big bad news in a chaotic instant delivery service market, but given the state of the venture market, the current economy, and recent consumer behavior, yes, people shop online, but they don't shop outside the same way they used to. It is becoming increasingly common to shop at — It probably won't be the last time.