Rapid-delivery startup Getir buys its rival Gorillas at a big discount as grocery apps continue to eat each other

• Grocery-delivery startup Getir has acquired its German rival Gorillas at a hefty discount.
• Gorillas tried to raise capital to continue to operate on its own but has accepted the deal from Getir.

Troubled grocery-delivery startup Gorillas has been acquired by its larger Turkish competitor Getir for a hefty discount

Insider first reported last month that Berlin-based Gorillas, founded in 2020, would likely be sold at a discount. The Financial Times reported Friday that the Getir-Gorillas deal was worth $1.2 billion and mostly comprised equity. Gorillas was last valued at $3 billion in 2021.

Tiger Global-backed Getir, which was founded in 2015, confirmed the news in a statement on Friday. The company said its acquisition of Gorillas underscored how it led "consolidation" in the rapid delivery sector.

"Markets go up and down, but consumers love our service and convenience is here to stay," Getir founder Nazim Salur said. "The super fast grocery delivery industry will steadily grow for many years to come and Getir will lead this category it created 7 years ago."

Insider has approached Getir and Gorillas for further comment.

Gorillas was one of a batch of startups that emerged during the pandemic promising to deliver groceries to customers' doors in minutes. The Berlin-based company, which slashed hundreds of jobs in May, counted the likes of hedge fund Coatue, tech giant Tencent, and DST Global among its backers.

The startup benefitted from an era of cheap cash where investors were happy to pump capital into loss-making businesses, plus the pandemic inducing global lockdowns.

Gorillas and its rivals gained notoriety for pursuing competitive ad campaigns that sought to onboard customers through aggressive discounts, and for establishing a pricey delivery model that involved setting up so-called dark warehouses to deliver on their promises of getting groceries to customers in less than 30 minutes.

However, a post-pandemic shift in habits, the shift in macroeconomic conditions driven by high inflation, and the war in Ukraine turned investors cold on startups that are regularly losing cash.

Nalin Patel, lead analyst for EMEA private capital at Pitchbook, said the deal made sense strategically as both Getir and Gorillas battled with layoffs in the face of these growing macro challenges.

Patel pointed to a fall in discretionary spending, as rising inflation has forced consumers to tighten their purse strings, as well as a reduced reliance on rapid grocery delivery services in general as COVID-19 restrictions that were in place during 2020 and 2021 had been lifted.

"This combination of factors has meant fewer people are using these platforms, and growth has been much harder to achieve, particularly in a low margin and crowded industry such as the food delivery space, which requires vast scale for profitability," Patel said.

The acquisition marks one of the most significant moves to consolidate the rapid grocery delivery market to date at the tail end of a period that has seen several European startups seeking to plant their flag get bought up.

In May, German rapid grocery delivery unicorn bought competitor Cajoo, which had been backed by French giant Carrefour in a deal reported to be worth almost $100 million. Getir, meanwhile, had previously acquired smaller British competitor Weezy.

The opportunities to buy European startups in the sector have attracted US attention too. US tech firm Gopuff, last valued at $15 billion, agreed to acquire British competitor Dija in August 2021 after it was in business for just eight months.

Insider's Tom Dotan reported last December that there would be widespread casualties in the rapid grocery delivery sector in 2022.