So now the time has come. The Turkish express food delivery company Getir is taking over what is probably Europe’s best known competitor, but also the most notorious because of months of employee protests: the German “quick commerce” provider Gorillas. Getir officially announced the deal on Linkedin, among others. There has been speculation about this for weeks. Shortly before, as is usually the case with larger mergers like this one, a possible savior popped up out of nowhere: Delivery Hero.
Out of nowhere? It was probably Gorillas founder Kağan Sümer who was very interested in bringing Delivery Hero into play in order to get an even higher price from Getir. In any case, Gorillas probably had a “term sheet” from Delivery Hero, who is known to be a food supplier himself and who had invested in Gorillas a good year ago, before the online hype had burst. For the management of gorillas, it was ultimately about getting as much out of it as possible. Not an easy task, because Gorillas was burning millions of euros a month until the end and was close to bankruptcy. This made the negotiating position difficult.
The start-up has never made any money anyway, nor have all the other super-fast suppliers. Above all, gorillas were fortunate to be born early. Sümer founded the delivery service at the beginning of the corona pandemic. Such an offer was just right for many people. They could hardly go out or didn’t want to go to the supermarket for hygienic reasons. The irony of fate: Sümer, the founder of Turkish origin, saw Getir as a model for a delivery service that brought groceries to the door within just ten minutes. After just a few months, his company was named a so-called unicorn, a start-up whose value investors estimate at more than a billion dollars. Then all the hassles soon started: first the employee protests, bad press, and in the end there were no investors either. Financially, the short adventure of less than three years was still worthwhile for Sümer.
According to previous reports, he should be leaving the merged company. But the management should receive a bonus of ten million euros. The largest part of it apparently goes to Sümer. This was not officially confirmed at first. The founder always stayed away from the public and had to deal with all sorts of hostilities. Nevertheless, he has achieved a lot with gorillas. It shook food retail in Germany quite a bit: Rewe got involved with its competitor Flink, Edeka became even more involved in the online supermarket Picnic, and even Aldi is now intensively testing online food retail in the USA, Great Britain and Switzerland – one of the models possibly to be carried to Germany at some point.
Gorillas showed the established retail groups how great the potential demand for food online can be. But now the hype is over. Of the many express suppliers that emerged during the pandemic, many are currently disappearing from the market. They either stop working or are taken over.
Sümer has been trying for months to get the best out of himself and the gorillas
Gorillas merges into Getir, but Getir isn’t a real winner either. Investors have devalued both companies by several billion. Overall, instead of seven billion dollars shortly before the deal, both are now apparently only worth half as much as before. The reason for this is also the rapidly falling demand. According to a study by Boston Consulting, consumers across Europe are the first to save on food orders. In addition, the services are becoming less attractive to customers due to rising food prices and higher fees. In Germany, personnel costs for couriers have also risen after the minimum wage was raised in October. Higher costs and, on average, smaller shopping baskets made the business even more unprofitable and increased the pressure on suppliers to merge. Gorillas also withdrew from many countries. Over the past few months, Sümer has been trying almost desperately to bag a takeover that is as lucrative as possible for gorillas.
However, this does not solve the problems of the express suppliers. The slump in consumption will continue, investors will be more difficult to find in view of rising interest rates, certain costs will remain. For the time being, quick commerce will therefore probably remain a loss-making business.
Getir’s advantage is that it has a wealth of experience of seven years. However, Getir is no more squeamish with its employees than gorillas. The company was criticized in Germany for months because drivers protested against the working conditions. At Getir, these are no better either. In addition, the company laid off around 14 percent of its staff at its headquarters in Istanbul in the spring of this year. These are larger dimensions than gorillas. According to the US medium Techcrunch, Getir employed 32,000 people worldwide at the time. The Turkish delivery service has been active in Germany since last year. There are also six other European countries and the USA. Getir’s aim is to be the leading supplier of ultra-fast vehicles in all of these countries. Characteristic of Getir and also Gorillas is the constant coming and going of new managers, but rarely to their financial disadvantage.
In the end everything went very quickly
Despite all these adversities, gorillas offer Getir a unique opportunity to gain a relatively cheap market dominance, not only in Germany. Getir is reported to have spent just 100 million euros. Gorillas will only make up 12 percent of the company as a whole, it said. The stake is valued at $1.2 billion, up from a value of $3 billion in September last year. Getir’s deal is said to be worth $8.8 billion, valuing the combined company at around $10 billion.
The deal catapults Getir to the top of Europe’s ultra-fast food suppliers. Getir is now expanding into several countries at once. There is also an opportunity to keep costs down. However, at least half of the Getir and Gorillas locations are said to overlap and could therefore be closed. It’s a tough cut for employees. However, the profitability of the joint venture could improve. It will therefore probably not make any profits for a long time.
The end of the online boom accelerated the decline of gorillas. In February of this year, Sümer announced that he was planning to raise new financing of $700 million or more this year. But nothing came of it. Instead, he considered merging with competitors like Jokr and Gopuff and tweaked the fee model, always aiming to reduce costs and increase shopping carts. Gorillas laid off employees, withdrew from countries and entered into partnerships with organic retailers such as Alnatura. But nothing helped. Gorillas manager Adrian Frenzel complained about a “phase of maximum uncertainty” in the summer. At least that’s over now. Now it’s clear: Gorillas is now part of Getir.