In a dramatic upheaval for one of Europe’s hottest startup sectors, Turkish fast food company Getir is nearing a deal to acquire German rival Gorillas.
After months of trying to raise money, combustion Tens of millions of euros a month, gorillas now $590 million Getir with cash and stock.startup rated $3 billion With the final funding round in September 2021.
The deal raised the eyebrows of many in the tech community. They wonder why Getir would want to buy a company that is losing so much money. Rated Getir $12 billion With its final funding round earlier this year, Gorillas is already operational in all of its European markets (UK, France, Netherlands, Germany) and has also expanded into Portugal, Spain and Italy.
“I don’t understand why investors would put money into this because it doesn’t make sense and just creates more problems.”
A European investor familiar with the quick commerce industry, who wished to remain anonymous, told Sifted: problem. ”
By eating out its competitors, Getir can win more customers, increase Gorillas’ market share in the European market, and take high-profile competitors out of the equation. You’ll also have access to Gorilla’s 180 “dark stores” spread across 44 European cities.
These sites act as mini-warehouses in residential areas, allowing for 30-minute delivery times, but are becoming increasingly difficult to come by as regulators crack down across Europe.
Two sources familiar with the deal told Sifted that acquiring the property was Getir’s primary motivation for buying Gorilla.
The gorilla responds to these allegations by saying, “In principle, Gorillas never comment on market rumors. ”
Sifted also reached out to Getir for comment, but did not receive a response at the time of publication.
Dark store discussion
The Netherlands has three cities: Amsterdam, Rotterdam and Utrecht. 1 year ban About opening a new dark store.France, on the other hand, is now trying Makes it difficult to place in city centers.
Dark stores are in the local government’s bad book because they are often located in areas where warehouses are not normally permitted, such as city centers or busy residential areas.the community is complained It is pressuring local politicians to take action over the noise and chaos caused by truck unloading in previously quiet areas.
Acquiring rivals and their existing warehouse network may be the easiest way for Getir to expand its footprint now that authorities have frozen new dark stores.
Getir is also trying to circumvent regulations in other ways. In July, it attempted to open a dark store in Amsterdam that doubles as a face-to-face supermarket.judgment upheld the order The local council said the site must be closed in two weeks.
Stephan Soroka, a foodtech researcher and operational advisor to a quick commerce firm, said, “The dark store ban situation in the Netherlands and Paris is one of the biggest possible motivations for Getir in this particular deal. ‘ said.
Any room for more Getir?
Executives who work for rival quick commerce companies agree that real estate was “one of the most important reasons” for Getir to buy Gorillas. got French rival Frichti in January.
“Gorillas were a little faster than Getill in securing them.” [warehouse] Location — the Frichti acquisition probably helped a lot, too,” they say. “[The acquisition] give [Getir] There’s a lot of room to wiggle to build a network of good places they haven’t done before: Gorillas’ Paris network is far superior to Getir’s. ”
One of the investors behind the European quick commerce startup told Sifted that if Getir buys Gorillas, it will inherit some of the wisdom of navigating the French system that comes with the Frichti acquisition. I’m talking deaf.
“Frichti was performing much better than its competitors at the local level. When Frichti was acquired, the business was still the leader in France and had raised much less capital.” they explain. “I am sure there is a lot of know-how that we can use in the future.”
Competitor executives say they also understand the location permits for Gorilla’s existing warehouse in France in case of a sale.
They added that the Netherlands has already secured permits for new locations in cities where gorillas reside, which could theoretically be transferred to Gettier.
“The problem is, buying more unprofitable hubs creates more unprofitable business.”
However, not everyone understands how smart it is to acquire these sites.
“The problem is that buying more unprofitable hubs creates more unprofitable business. After all, I think it’s very short –sighted [of Getir] Because you just accumulate more burning” — this is 60 million euros per month For May Gorilla — says the first investor.
Short-term benefits?
Gorillaz’ track record as a business partner may be another good reason to avoid an acquisition, the first investor says.
“their [Gorillas’] They just don’t pay their suppliers, so their credit score is absolutely terrible,” they say.
According to documents from Creditscore, a European credit rating agency, reviewed by Sifted, Gorillas has a low credit score and the company is prone to late payments. The default probability in June was 21.22%. This is well above the average German default probability of 1.06%.
In response to these claims, Gorillas says it is a “fully solvent organization”.
“Thanks to our investments in our company and our focus on profitability as part of our new corporate strategy, we are in good financial standing and can meet all financial demands related to our day-to-day business activities. Our business partners value us as a reliable partner.”
Another potential problem with the acquisition is that the costs of integrating Getir and Gorillas will be substantial, the initial investor speculates.
“Many hubs with duplication have to be closed, and then there will be rental costs for several years…and surplus personnel cannot be easily let go.” France and Germany succeed difficult to ignite Employees, they explain.
And even if engulfing more black shops is the purpose of Europe’s tech industry’s most-watched trading game of the year, investors are likely to be skeptical as the regulatory environment surrounding black shops remains lingering. , warned that playing real estate can be short-sighted…unpredictable.
Getir may get early access to more real estate profits in heavily regulated markets in Paris and Amsterdam, but more crackdowns on dark stores are expected — Paris to establish new regulations in 2024 It will be — it may not be long.
Tim Smith is Sifted’s Iberia correspondent.he tweets from @Timp Smith
Miriam Partington is Sifted’s DACH correspondent.She also covers the future of her work, co-author Sifted’s Startup Life newsletter tweets from @mparts_
