Once celebrated as a standout in the delivery startup arena with a valuation of $12 billion, Getir is now contemplating the sale of assets and possibly withdrawing from certain markets that are not central to its business model. This move comes as the company faces calls from its investors to diminish its financial losses.
The Turkish company, which experienced a surge in business during the Covid-19 pandemic due to an increase in delivery demands, is now exploring various strategies. These include divesting or closing operations outside its main market in Turkey, according to sources familiar with the matter.
Last year, Getir expanded its footprint by acquiring FreshDirect in the US and has operations in the UK, the Netherlands, and Germany. However, as the pandemic restrictions eased, the demand for its services declined, leading to a monthly cash burn of around $50 million, as per insiders. The company's investors are now pushing for significant restructuring efforts.
Investment in Getir has been robust, with contributions from entities like the Abu Dhabi sovereign wealth fund Mubadala Investment Co., Tiger Global, and Sequoia Capital, especially during the height of the pandemic when home deliveries were more prevalent. The company's founder and CEO, Nazim Salur, had ambitions of making Getir a global player similar to Uber Technologies Inc., intensifying competition within the grocery delivery sector to achieve delivery times of 15 minutes or less.
Getir has opted not to comment on these developments. Similarly, inquiries to investors such as Sequoia and Tiger Global have not been immediately answered.
Alix Partners, the advisory firm, is reportedly preparing to offer restructuring options to Getir and its stakeholders within the next couple of weeks. These discussions are ongoing, and no concrete decisions have been made yet. The extent of potential job cuts will likely hinge on whether the company decides to sell or close certain operations.
In addition to these challenges, Getir has been engaged in merger talks with German competitor Flink SE, as reported by Bloomberg. Notably, Mubadala is also an investor in Flink.
Getir has invested over $2 billion to date, as per PitchBook data. The company previously exited several European markets last year and reduced its global workforce by more than 10%, following difficulties in sustaining its operational expenses. Its most recent funding round in September valued the company at $2.5 billion.
If Getir decides to exit the European market, it would significantly reduce the number of rapid grocery delivery startups that emerged in the region during the pandemic. Getir has been active in consolidating the market, acquiring competitors such as Gorillas Technologies GmbH in Germany in 2022 and Weezy in the UK the year before.
These ventures offered a limited assortment of groceries delivered from compact urban warehouses by couriers on mopeds or bicycles, banking on the premise that consumers would be willing to pay a premium for convenience and speed. However, the high operational costs and consumer price sensitivity have made profitability challenging, according to Ruth Lewis, a senior manager and retail specialist at Bain.
Moreover, Getir and its peers are also facing stiff competition from established delivery services like Uber Eats, Just Eat Takeaway.com NV, and Deliveroo Plc, further complicating their market position.
Getir's strategic reassessment reflects broader challenges in the delivery sector, especially as the world adjusts to post-pandemic realities.
