The fast-track grocery delivery service Getir is reportedly now worth a quarter of what it was valued at 18 months ago, after a big shakeout in the sector amid declining consumer demand.
The Istanbul-based company is raising $500m in a funding round that will value the business at $2.5bn and is expected to close later this month, according to a Financial Times report citing people familiar with the matter.
It had been valued at up to $11.8bn when it raised funds in March 2022, but its valuation was slashed to $6.5bn in a funding round in April. Despite its reduced valuation, Getir’s new funding is among the biggest deals this year.
The FT reported that the money comes from existing shareholders including the Abu Dhabi wealth fund Mubadala Investment Company, the venture capital firm G Squared and the investor Michael Moritz, who recently quit Sequoia Capital after almost four decades at the California venture capital group.
Getir announced 2,500 job cuts across five countries last month as demand waned in the delivery market. The cuts amount to more than a tenth of its 23,000-strong workforce and affect couriers, pickers and office employees in the UK, US, Germany, the Netherlands and its home market Turkey.
Getir has pulled out of Spain, Italy and Portugal because the cost of living crisis means there is less demand for rapid deliveries of groceries in less than 20 minutes, while costs have also gone up.
Demand for grocery delivery boomed during the height of the Covid-19 pandemic but dropped after lockdowns ended and bars, restaurants, shops and offices reopened.
Since being set up in 2015, Getir has grown into one of the largest of more than a dozen delivery app companies, but most of its rivals have been sold or closed down. Those that remain have tightened their operations, laying off riders and selling warehouses.
Getir bought up its German rival Gorillas in a $1.2bn deal last December after snapping up the UK’s Weezy a year earlier. The smaller London-based firm Jiffy ceased deliveries last year while the US operator Gopuff bought Fancy and Dija, both UK companies, in 2021.
As well as competing with Gopuff and other remaining fast-track specialists such as the UK’s Zapp, Getir also faces a growing threat from the bigger delivery companies Uber Eats, JustEat and Deliveroo, which have branched out into sending out groceries alongside takeaways. In the UK, Tesco, Sainsbury’s and Ocado also operate their own rapid delivery services – Whoosh, Chop Chop and Zoom.
Interest from investors in the sector has fallen sharply after they poured more than $14bn (£10.5bn) into the market globally over 2020 and 2021, according to analysts at PitchBook. Last year, the value of on-demand delivery investment globally by venture capital investors plummeted by more than 60% to £3.8bn and is on track for another fall this year.
