True to its business concept, the Turkish “direct delivery” of giantess Getir went up quickly. Now, with the fast-commerce industry in freefall, it’s plunging just as fast. On Monday, the company — once valued at close to $12 billion — announced it would close its operations in the US, UK and Europe to focus solely on its home market of Turkey.
The move puts a bitter end to the company’s very aggressive expansion strategy that saw it raise billions of dollars to grow organically and also acquire a number of equally aggressive, but struggling, competitors to position itself as a market leader. The shutdown looks set to affect at least 6,000 jobs in the closing markets, but – according to the company – just 7% of its revenue. Alongside the closures, the company said it would receive 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. More details, including financials, below.
Redundancies: To be clear, Getir officially announced 1,500 UK job cuts in the brief it sent to reporters: no details on jobs affected elsewhere. However, reports were superficially In recent days it had started sending notifications to 1,800 employees in Germany — HQ of Gorillas (which it acquired in late 2022). A source close to the company told us the number is closer to 1,100 (one number may include contractors).
Meanwhile, when Getir acquired FreshDirect in the US – just six months ago, in November 2023 – it added 2,300 employees. Add these different numbers together and you get about 6,000, although since Getir was already active in the US before this acquisition, they may be more affected. A year ago, the company had 32,000 people working for it.
The pandemic window of opportunity: The move is a bleak chapter for the startup founded in 2015 and gaining traction 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 shopped less in person – partly to minimize contamination, partly because in-person shopping became really challenging due to supply issues, long queues for staggering entries And much more.
Just as companies like Uber have aggressively raised revenue to fund aggressive growth and competitive races across the globe, so has Getir: between its first outside investment in 2017 and September 2023, it raised more than 2.3 billion dollars from approximately 36 investors, including Sequoia, Tiger Global, Silver Lake, Mubadala, Goodwater, G Squared and A*.
It also made some aggressive acquisitions of competitors to increase its market position – but mainly, the consolidation was not just a power move, but a way for other competitors in the market to get out of the brutal race.
In addition to FreshDirect and Gorillas, Getir picked up businesses in Spain, Italy and the UK at bargain prices. He also reportedly had interests in Zapp in the UK and Flink in Germany at one point, so he certainly saw himself as a savior in the troubled market. It was a strategy also adopted by Getir’s biggest global competitor, GoPuff. Today’s news makes things easier for GoPuff in the US and UK
The Turkish window of opportunity: This is a grim chapter, but not a final one. Getir also announced it will raise new money to double down on its home market, a round led by Mubadala and G Squared.
Getir didn’t disclose who else was involved, or how much it raised, or whether it was equity or debt, so it’s hard to say what this 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 remain investors in the company now or have cashed out.
The writing on the wall: Getir, like its peers in the drop-shipping market, has been struggling for some time. In May 2023, it cut 14% of staff and scrapped large parts of its geographic expansion plans as it tried to right-size the business for more capital. A few weeks later, it pulled out of Spain, Italy and Portugal in July 2023. At the time, it was well understood that it was because those markets were simply not thriving, but Getir was indeed trying to close another round of funding, and investors had said they wouldn’t invest in it if it didn’t cut costs.
Documents shared with TechCrunch show that for calendar year 2023, the company earned $3.3 billion, with the US and Europe (including the UK) accounting for around $1 billion of that over the course of of the year. (It’s not clear from Getir’s statement what the 7% figure relates to. We’re asking.) From the documents we’ve seen, at the end of last year, the company was not Ebitda positive in any of its geographies.
Big, bad news in the chaotic market for dropshipping services, but given the state of the stock market, the current economy and consumer behavior these days — yes, people are buying online, but they’re also far behind, shopping like they used to — probably not the last.
