As quickly as the flash deliverers came, they disappeared just as quickly.
Grocery delivery company Getir is leaving the Netherlands, the United Kingdom, Germany and the United States, the company announced on Monday. Gorillas, acquired by Getir at the end of 2022, will also disappear. With the departure of the two companies, the German Flink is the last remaining flash delivery company in the Netherlands.
Getir (23,000 employees in 2023, turnover unknown) wants to concentrate on activities in Turkey, where the company originally comes from. To this end, Getir has raised $500 million (466 million euros) in a new investment round led by Mubadala, Abu Dhabi’s sovereign wealth fund. Part of the agreement is that Getir must make significant cuts in an attempt to get costs under control. For this reason, Getir previously withdrew from Spain, Italy and Portugal.
The departure of Getir and Gorillas means that hundreds of employees in the Netherlands, especially delivery drivers, will lose their jobs. It is unclear exactly how many, a spokesperson for Getir does not want to answer questions about layoffs. What is clear is that Getir’s warehouses will close on May 15. Then the Gorillas and Getir apps can no longer be used by Dutch customers.
Faster than you
Just in front of a Gorillas warehouse in Amsterdam, a courier speeds along the narrow cycle path on Monday afternoon. “Faster than you”, it says on his work jacket, referring to the promise of delivery within 10 minutes that Gorillas wanted to conquer the Netherlands with. A few hundred meters before the entrance he falls to the ground with a thud. The battery flies out of his e-bike. “I’m okay, I’m okay”he says, laughing to concerned bystanders as he gets up and continues cycling.
It is not clear why the courier cycles so hastily. It is quiet in the warehouse, three delivery drivers wait on cramped chairs until the next order arrives. According to shift leader Buddy van den Bos, orders have decreased after corona, but have remained stable.
The employees have just been told that Getir is closing down. It is not a big surprise, says Van den Bos: “We had already heard the rumors.” They have not yet been told exactly what the closure means for them.
This should become clear in the coming days during meetings in the warehouses where Getir will update the employees. In an email sent to employees on Monday, manager Alexander Streefkerk promises “that every employee is treated fairly.” Employees who are employed are entitled to severance pay.
In an internal presentation by NRC has been viewed, it becomes clear what that compensation entails: the legally required transition compensation of one-third monthly salary per entire year of service. Getir doubles that amount for employees in the Netherlands.
“Nobody is happy with this package,” says British Joseph Skull, who drives for Getir in Amsterdam. He calls the severance package “a steaming pile of shit,” says Skull. “You can quote me on that.”
Nuisance and traffic chaos
With the departure of Getir and Gorillas, the biggest start-up hype of the last five years comes to an end. The phenomenon of flash delivery – delivering groceries to your home within minutes – grew rapidly during the corona pandemic, especially in large cities.
The three largest companies, Flink, Gorillas and Getir, hired thousands of delivery drivers and opened warehouses (‘dark stores’) across cities to facilitate deliveries. Dozens of municipalities entered into battle with the flash services, which caused a lot of nuisance and traffic chaos with their warehouses in the city center and racing bicycle couriers.
The flash delivery companies needed a lot of money for all these expansion plans. Getir (founded in 2015) and Gorillas (founded in 2020) have jointly raised around $4 billion in investments in recent years. That money was largely spent on setting up warehouses, discount promotions for customers, hiring staff and marketing stunts.
There was no prospect of a profitable business model. The problem: if a flash delivery person wants to earn anything, a customer has to do his entire week’s shopping via Gorillas or Getir. A customer who only orders an avocado or carton of milk now costs a flash delivery person a lot of money. Gorillas lost between $60 and $90 million last year. Per month.
Growing pains
Getir was the first flash delivery company in Europe in 2015. Founder Nazim Salur’s company focused on its home country Turkey for the first five years. There, Getir had perfected flash delivery, from vans that drove through Istanbul with groceries to a well-oiled logistics machine with cyclists and warehouses.
During the pandemic, Salur saw competitors across Europe copy Getir’s concept. Dozens of companies emerged with names like Gorillas, Glovo, Jiffy, Cajou, Weezy, Zapp and Dija, loaded with venture capital and without any prospects for profitability.
The German Gorillas in particular grew rapidly under the leadership of Turkish-German entrepreneur Kagan Sümer, who started Gorillas in 2020 in his apartment in Berlin with money from his parents and a group of friends. Gorillas’ first employees purchased products from local supermarkets, put them in Sümer’s refrigerators and sold them to customers at a loss. Within two years, Gorillas grew to 15,000 employees, a painful process that came with many growing pains. For example, Gorillas employees, also in the Netherlands, were often paid little or no wages and were sent on the road with unsafe bicycles.
Just a few months after its founding, Gorillas was the first flash delivery company in the Netherlands, followed in 2021 by Getir, Zapp and Flink. In that competitive battle, which raged across Europe, companies burned millions of dollars a week.
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Hype sensitive
All those millions were “money well spent,” Getir founder Salur said in an interview with NRC. “In normal life, millions per week sounds like a lot, but for us that is not the case. It’s about how much money you have left and how long you can last with it.”
Salur thus perfectly summarized how investors in start-ups reason. Funds pour hundreds of millions into dozens of different companies in the hope that one of the start-ups will eventually emerge as the next Facebook or Google. The profit from that one hit recoups the loss on all other failed investments.
In addition, capital was extremely cheap during the corona pandemic due to the historically low interest rates at the time. That left investment funds filled with money from wealthy individuals and looking for ways to spend all that excess money. Investment funds, which are in any case very sensitive to hype, turned out to be willing to take an extra gamble.
The flash deliverers were an attractive target. A new growth market without a clear winner yet. The hope was that consumers would become so used to quick groceries at the door during corona that this trend would survive after the pandemic.
That didn’t happen. Getir, which was valued at more than $11 billion at its peak, is now worth only $2.5 billion. That means many of the early investors in Gorillas and Getir have had to write down hundreds of millions of dollars on their investments.
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