Business

Getir pulls out of US, UK, Europe to focus on Turkey; 6,000+ jobs impacted

Image credits: Angel García/Bloomberg / Getty Images

True to its business concept, Getir, the Turkish “instant delivery” giant, has grown rapidly. Today, while the fast-trading industry is in free fall, it is plunging just as quickly. On Monday, the company – once valued at nearly $12 billion – announced it would cease operations in the US, UK and Europe to focus solely on its home market of Turkey.

The move brings a bitter end to the company’s highly aggressive expansion strategy, which allowed it to raise billions of dollars to grow organically and catch up with a number of equally aggressive, but struggling, competitors. to position itself as a market leader. The closures appear to impact at least 6,000 jobs in the closing markets, but – according to the company – only 7% of its revenue. Alongside the closures, the company said it would benefit from a fresh injection of investment as a lifeline to expand its runway.

“This decision will allow Getir to focus its financial resources on Turkey,” a company statement said.

Getir isn’t the only one in this space raising money to stay afloat while stepping back from global projects. Earlier this month, reports emerged that Flink, a former rival of Getir in Germany, had raised some $106 million, about a third of which has been secured so far. This comes as Flink also consolidates its position. Coinciding with the leak of funds, the company apparently “liquidated” its operations in France. A source close to Flink tells me that it’s really a question of whether to join another company or raise more money. In other words, market instability creates uncertainty that also impacts others.

More details on Getir, including financials, below.

Layoffs: To be clear, Getir only officially announced cuts of 1,500 jobs in the UK in the brief statement it sent to journalists: no details of jobs affected elsewhere. However, reports have surfaced in recent days that it has started sending notifications to 1,800 employees in Germany, home of Gorillas (which it acquired in late 2022). A source close to the company told us that number is closer to 1,100 (a figure can include contractors).

Meanwhile, when Getir acquired FreshDirect in the US – just six months ago, in November 2023 – it hired 2,300 employees. Add these different numbers together and you get around 6,000, although Getir was already active in the US before this acquisition, so the impact could well be greater. A year ago, the company employed up to 32,000 people.

Its pandemic window of opportunity: The move is a dark chapter for the startup which was founded in 2015 and enjoyed great success in Turkey before the pandemic – Getir means “to bring” in Turkish. This led to aggressive investment and expansion that peaked during Covid-19, when consumers were shopping less in person – partly to minimize infection, partly because in-person shopping became really difficult in due to supply issues, long lines to stagger entries and more.

Just as ride-sharing companies like Uber have raised aggressively to fund aggressive growth and competitive struggles across the world, Getir has done the same: between its first outside investment in 2017 and September 2023, it has raised more than 2 .3 billion dollars from some 36 investors, including Sequoia. , Tiger Global, Silver Lake, Mubadala, Goodwater, G Squared and A*.

It also made aggressive acquisitions of competitors to increase its market position – but this was notably a consolidation that was not just a power move, but a means for other market players to difficulty and short of money to get out of the brutal race. .

Besides FreshDirect and Gorillas, Getir has resumed operations in Spain, Italy and the United Kingdom at bargain prices. He was also reportedly interested at one point in Zapp in the UK and Flink in Germany, so he definitely saw himself as a consolidator in a struggling market. This is a strategy also adopted by Getir’s largest global competitor, GoPuff. Today’s news makes things easier for GoPuff in the US and UK.

Its Turkish window of opportunity: It’s a dark chapter, but not the last. Getir also announced that it would raise new money to double its stake in its domestic market, a fundraising led by Mubadala and G Squared.

Getir did not reveal who else was participating, or how much it had raised, or whether it was equity or debt. So it’s hard to say what that means beyond giving the company some runway and a chance to focus on a market that has worked.

We reached out to some of its previous investors, Sequoia and Tiger Global, to see if they would comment on whether they now remain investors in the company or have cashed out.

Right now, the strategy of the biggest players in the instant food delivery market seems to be: accept that our international strategies weren’t good ideas and just focus on our core markets for now .

The writing on the wall: Getir, like its peers in the instant delivery market, has been struggling for some time. In May 2023, the company cut 14% of its workforce and canceled much of its geographic expansion plans as it worked to right-size the business before raising more funding. Just a few weeks later, it withdrew from Spain, Italy and Portugal in July 2023. At the time, it was widely understood that it had ceased operations because these markets were not yet fully operational. just not thriving, but Getir was effectively trying to close another round of financing, so it makes sense to reduce loss-making operations in this context.

Documents were shared with TechCrunch that indicate the company, for calendar year 2023, earned $3.3 billion, with the US and Europe (including the UK) accounting for around $1 billion. dollars over the entire year. (Getir’s statement doesn’t make it clear what the 7 figure refers to. We’re asking.) According to the documents we’ve seen, at the end of last year the company had only one Positive Ebitda in none of its geographic zones.

Big and bad news in the chaotic market for instant delivery services, but given the state of the venture capital market, the current economy and consumer behavior these days – yes, people buy online, but they are also very often back outside, shopping as before. – it’s probably not the last.

If you have a tip on this or any other story, contact me.

Additional reporting Anna Heim





News Source : techcrunch.com
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Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe. Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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