Getir and Gorillas: A Game-Changing Merger in Quick Commerce

In December 2022, Turkey's Getir acquired Berlin-based Gorillas for $1.2 billion, creating a company valued at $10 billion. The merger aimed to improve delivery services across Europe but led to rising costs due to the complex integration of warehouses, staff, and technology.

Section 1: Background and History

Getir, launched in 2015, mastered quick commerce by handling complex logistics in Istanbul's traffic. Initially a tech venture for car dispatch, Getir expanded to include water delivery, groceries, and short-term staffing.

Gorillas, launched in 2020, quickly scaled to a $3 billion valuation with 18,000 employees, meeting the high demand for instant delivery in urban areas.

Section 2: Business Model

Getir and Gorillas focus on quick commerce, rapidly delivering groceries and essentials from strategically located dark stores. Getir's model also includes short-term worker dispatch and larger grocery orders.

Both companies use discounts to attract customers and grow market share, effectively expanding their user base and establishing a strong presence.

Section 3: Market Size and Opportunity

In Europe, the quick commerce market is projected to reach approximately $70 billion by 2030, driven by high urban population density and increasing demand for rapid delivery services. The market is expected to grow at a compound annual growth rate (CAGR) of approximately 25% from 2021 to 2030.

Section 4: Revenue and Strategy

Revenue generation for Getir and Gorillas comes from delivery fees and product markups. To boost order frequency and improve customer loyalty, both companies leverage aggressive discounting and subscription models. For instance, offering monthly subscriptions that waive delivery fees for a fixed number of orders encourages regular use of their services.

The new company aimed to streamline operations and cut costs by consolidating resources and expertise, improving its competitiveness against other major players like Flink.

Section 5: Fundraising

Gorillas has raised around $1 billion, while Getir's latest valuation stands at $2.5 billion (Q2-2024). The $1.2 billion merger highlights strong investor confidence in the combined company, providing essential capital to scale operations, expand reach, and invest in new technologies.

Section 5.1: Key Investors

• Mubadala Investment Company: Led a $250 million funding round on June 25, 2024, playing a crucial role in the company's growth.

• Sequoia Capital: A major investor in Getir, known for backing high-growth tech companies.

• Tiger Global Management: Significant backer of Getir, specializing in technology investments.

• Silver Lake Partners: Invests in Getir with a focus on large-scale technology ventures.

• Coatue Management: A key investor in Gorillas, recognized for investing in fast-growing tech companies.

• Tencent: The Chinese tech giant invested in Gorillas, expanding its global tech portfolio.

• DST Global: Notable investor in Gorillas, focusing on internet-based companies.

Section 6: Competitive Advantage

Getir's competitive edge comes from its experience managing complex logistics in challenging environments like Istanbul. This expertise helps the company tackle similar challenges in other markets. The merger with Gorillas expands its geographic reach, resources, and capabilities, strengthening its position against competitors like Flink, Uber Eats, and DoorDash.

Section 7: Challenges

• Market Differences: Getir's experience in Istanbul may not directly translate to more developed European cities due to differences in infrastructure, regulations, and consumer behavior, posing challenges in adapting their strategies.

• Customer Retention and Profitability: Heavy reliance on discounts makes it difficult to retain customers without cutting into profits, especially in a competitive market where sustaining growth and profitability is already challenging.

• Operational Costs and Regulations: Managing a large logistics network is expensive, and expanding into new markets involves navigating many regulations, further increasing operational costs.

(Sources: Reuters, Techcrunch, Bloomberg)