More tough times for the instant-delivery startups that once flooded the markets of Europe. Getir, the company backed by Sequoia and other big investors and once valued at upwards of $12 billion, today announced that it would be officially pulling out of Spain, Italy and Portugal as it inched closer to finalizing a round of investment.
Getir also confirmed that it would continue to operate in the U.K., the U.S., Germany, the Netherlands and Turkey. The statement on the U.K. business puts to rest rumors that had been swirling that Getir was close to filing for bankruptcy protection (administration) in the country.
Getir’s retreat comes as it faces a major cash crisis and struggles to close a funding round that has been months in the works. The round was reportedly as high as about $500 million earlier this year, but that sum has reduced in recent weeks and will reportedly come at a big cost: rumors are that it could see Getir’s valuation halved or more in the process.
It’s not the only one: We’ve confirmed with sources close to one of Getir’s would-be rivals, Flink, that it raised $150 million a couple of months ago at a valuation of around $1 billion — only one-third of its previous $3 billion price tag. However, even under price pressure, Flink may have dodged a bullet: that fundraise came in the wake of the company walking away from acquisition talks with Getir.
One source alleges Getir is still burning through $100 million each month, one reason why the company may be trying to reduce its operational footprint.
Getir said today that it will continue its operations in the U.K., U.S., Germany, the Netherlands and Turkey — which currently accounts for the majority (96%) of its revenues.
The company provided us with the following statement:
“Getir, the ultrafast grocery delivery pioneer, announced that it intends to withdraw in an orderly manner from Spain, Italy, and Portugal. At the same time, Getir is finalizing a funding round and will continue to operate in the UK, the US, Germany, the Netherlands, and Turkey, which generate 96% of the company’s revenues,” it said. “Getir’s withdrawal from these three markets will allow it to focus its financial resources on existing markets where the opportunities for operational profitability and sustainable growth are stronger. Getir is very grateful for the hard work and dedication of all its employees in Spain, Portugal and Italy.”
It should be pointed out that there have been reports of Getir’s move out of Spain since June, per union regulations; this is the official confirmation from Getir. The company had already pulled out of France in June.
Mubadala, the Abu Dhabi investment firm that already backs Getir (as well as others in the space, specifically Flink), confirmed to us this week that it will be leading Getir’s next investment round, although it declined to discuss timing or any financials.
“Mubadala has been an investor in Getir since 2021. We are currently in advanced discussions with Getir to lead their latest funding round and we continue to work closely with the company in support of its growth in the years ahead,” a spokesperson said.
A source tells us that the basis of the funding round is a $150 million loan that Mubadala provided to Getir at the start of this year. The source said that the loan was made on the condition that it would convert to equity if Getir was able to match the value with investments from others. If it failed to raise more funding from others, Mubadala’s $150 million would double to a $300 million equity stake, so the pressure has been on Getir to get a deal done.
Sky News reported earlier in July that the aim was to finalise this round by the end of the month.
Getir and its rivals have been on a rollercoaster ride over the last couple of years.
They soared to dizzying heights during and just after the pandemic as demand for food deliveries soared as people stayed away from physical stores, raising hundreds of millions of dollars to build out their footprints and aggressively quash each other in a mad rush of discounts and other promotions.
But it’s been a quick downfall for quick commerce, as companies have come crashing down the rails in the wake of customers moving back into pre-pandemic shopping patterns, economies and individuals facing cash crunches, interest rising and venture funding drying up.
Among the biggest of them, at the end of last year, Getir gobbled up one of its biggest rivals in Europe, Berlin’s Gorillas. It was on the cusp of taking out another biggie out of the German market, Doordash- and Mubadala-backed Flink, last valued at some $3 billion.
Flink walked away from that deal, however, opting instead to raise $150 million on its own. Flink operates on a much smaller scale, but also a different one, in that its inventory is closely interlinked with that of one of its strategic investors, the German retailer REWE. That has given the startup better economies of scale. Now, Flink is profitable in half of its warehouses, a spokesperson said today, with the others on track to be profitable by the end of this year. (You can read more on Flink’s approach here.)
Gopuff, another big player out of the U.S. market, has also made a number of waves in Europe, and it will be worth watching what moves it makes in the wake of all this.
We’ll update this post as we learn more.