Turkish grocery delivery firm Getir acquired its German rival Gorillas for an undisclosed amount, the company said Friday.
“Markets go up and down, but consumers love our service and convenience is here to stay,” Getir founder Nazim Salur said in a statement Friday.
“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.”
Loss-making grocery delivery services are enduring a tough market environment, in which investors are reevaluating positions in companies most exposed to the effects of tighter monetary policy and a rising cost of living.
The long-rumored takeover values Gorillas at $1.2 billion and the broader Getir group at $10 billion, according to a report from the Financial Times. That would represent markdowns of 61% and 15% from their last respective valuations.
Earlier reports had suggested the deal would be financed with a combination of Getir equity and cash.
Istanbul-based Getir didn’t disclose financial details for the deal but said in a statement that it “underscores how Getir leads consolidation in this sector.”
Gorillas was among the most hyped startups in the rapid-delivery sector, promising its users delivery times as low as 10 minutes and discounts subsidized by venture capital. Founded in May 2020, the company expanded aggressively during the coronavirus lockdowns.
However, Gorillas ran into trouble earlier this year, laying off hundreds of its employees and exiting markets generating less revenue, like Italy and Belgium.
‘A short-term solution’
“Gorillas had only two choices — sell or go out of business,” Brittain Ladd, an independent retail industry consultant, told CNBC via email.
Getir is likely acquiring Gorillas for its dark stores, small facilities that house stock for online delivery rather than in-store shopping, according to Ladd.
“The deal makes sense for Getir but it’s a short-term solution. Many countries have enacted laws or are enacting laws to shut down dark stores,” Ladd said.
Getir, which was last valued at $11.8 billion, has operations in nine countries including Turkey, the U.S., U.K., Germany and France. It also opted to cut jobs earlier this year.
The rapid delivery industry has seen a wave of consolidation, with the U.K. grocery startup Weezy also being bought by Getir and German firm Flink’s Austrian subsidiary ceasing operations and going into insolvency.