Delivery Hero joins gorillas: new money for the gorillas economy

At first glance, this seems anything but understandable: Why is the Dax group Delivery Hero, which is successful with its delivery services worldwide, getting involved with Gorillas of all places? Delivery Hero announced on Tuesday that it had acquired eight percent of the controversial quick commerce provider for around 200 million euros. These delivery services aim to bring online orders to customers in hours or minutes. Gorillas, founded in early 2020 by the Berlin entrepreneur Kağan Sümer, has been faced with accusations of mistreating its drivers for months.

Only at the end of last week threw that Gorillas Worker Collective, a loose association of employees, the company has de-registered drivers from social security, but continued to employ them. The company contradicted this, just as it has to dispel negative headlines almost every week. A few days earlier, for example, it had to justify terminating employees without notice. The reason for this was that they were said to have participated in wildcat strikes and blockades, which the company believed would have endangered other employees.

Quarrel, anger. Accusation, reaction – this has been going on for months. The result: a rather battered image.

“If you don’t have a strong partner, you won’t survive in the long term”

By contrast, among founders and investors, Gorillas is one of the most exciting things that the German start-up scene has produced in retail since Zalando. And now the entry of a Dax company. For gorillas this is something like a guarantee of survival and doping for the race for first place in quick commerce. “Those who do not have a strong partner will not survive in the long term,” says Marc Funk, founder of the e-food platform Front-Now.

Gorillas stumbled last, was at times unsuccessful in the search for investors, the financial crisis was great. The start-up burned up money every day. In all likelihood, there will no longer be a shortage of liquidity in a Dax group among shareholders anytime soon.

With customers in ten minutes: Bicycle courier with a gorillas backpack in Berlin.

(Photo: TOBIAS SCHWARZ / AFP)

And Delivery Hero? What does the DAX company, which is building a similar offer with Foodpanda, have from the start-up with the tarnished image? “Foodpanda and gorillas will share the drivers,” says Funk, who founded a delivery service himself with Getnow. Essentially, the deal is also about the drivers, who are in short supply when they are poorly paid. In one fell swoop, Delivery Hero buys into the largest fleet of drivers in a delivery service in Germany, but also worldwide. Because that is the company’s claim.

Niklas Östberg, boss and co-founder of Delivery Hero, says that the group has made it its business to promote fast trade “worldwide”. In this respect, it is fitting that gorillas are already on the move in nine countries, including the USA and New York there, and employ a total of 11,000 people. Rainer Münch, retail expert at the consulting firm Oliver Wyman, goes even further: “Delivery Hero has bought a stake in an entire infrastructure with drivers and warehouses,” he says, “a brand, a regular clientele, digital customer access and the competence to expand abroad . “

Investors from China also believe in gorillas

Anyone who still had doubts that ten-minute delivery services with names like Flink, Wolt or Getir can now hold up will be taught better. The business model has become an indispensable part of big cities. Gorillas has managed to generate over $ 300 million in revenue in just one year, with steady double-digit monthly revenue growth.

In addition, Delivery Hero is not the only donor. The start-up raised a total of one billion euros in the financing round, including from the Chinese technology group Tencent. Mathematically it turns out loud Reuters a value for gorillas of 2.5 billion euros.

According to observers, the arrival of Delivery Hero heralds the first phase of so-called consolidation in the industry. What is meant is the big eat and the providers are eaten until only a few are left. It was similar with restaurant delivery services, a market that Lieferando now largely dominates in Germany and in which Delivery Hero is a big player worldwide.

The entry also means a U-turn

But the entry shows something else: “You can see from Gorillas’ decision not to expand further in the USA, for example, that sales growth is no longer the top priority,” says Münch. “Now it’s about how you can alliance with partners in order to create synergies and eventually become profitable.” The assumption that what is still delivering separately is now moving together, as the US delivery service Doordash is said to be interested in joining Flink.

Whoever wins the race will ultimately be decided by several factors. About the amount of the fees and the prices for the food, which all experts believe will rise in the long run. But also about how efficiently the drivers are deployed. “It will result in the drivers delivering things other than food to keep them busy,” predicts Funk. Only recently, Östberg complained on Twitter about a “shortage of drivers” in Germany and too few “flexible working conditions”. It looks like he solved the problem in his own way.

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