Getir’s Late Bills, Staff Cuts Show Delivery’s European Decline

Turkish startup Getir said it struggled to pay some bills in Germany and will cut more than 10% of its global workforce, as the rapid delivery service seeks to raise new funds and attempt to turn around its cash-hungry business.

(Bloomberg) — Turkish startup Getir said it struggled to pay some bills in Germany and will cut more than 10% of its global workforce, as the rapid delivery service seeks to raise new funds and attempt to turn around its cash-hungry business. 

About 2,500 employees will be cut overall, though the company will continue operating in its five current markets, Istanbul-based Getir said in a statement to Bloomberg on Tuesday. 

Across the industry, companies that promised ultra-fast delivery of everything from perishables to birth control are cutting costs and consolidating. Investors who’d poured money into the sector during the Covid-19 pandemic are demanding a clear path to profitability. 

The dismissals will affect the whole organization, executives told employees on Tuesday, according to people who attended the calls.

The head of the company’s core delivery business, Hatice Evren, said that Getir is in the process of a fundraising round and right now there is less appetite to invest in tech companies, according to the people.

Workers will be notified if they are losing their job by the end of the week, Evren said. The cuts come after Getir — which in March 2022 raised money at a $11.8 billion valuation — shut its French, Italian, Portuguese and Spanish divisions earlier this year.

Many units still struggled after the company exited those markets. Founder and Chief Executive Officer Nazim Salur told employees at an all-hands meeting in July that Getir’s only profitable unit is its home market of Turkey, according to two people who were on the call. Getir also operates in the US, UK, the Netherlands and Germany.

Still, Abu Dhabi’s sovereign wealth fund Mubadala Investment Co., a major investor in Getir, has pledged continued support. It said in a statement to Bloomberg it was in advanced discussions to lead its latest funding round. 

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Accounts from more than half a dozen current and former Getir employees, ranging from managers and supervisors to warehouse workers, all of whom asked not to be identified because the information is not public, describe how the company has struggled with slowing demand in recent months.

Shelves intended for fresh produce at Getir’s Berlin dark stores — small, centrally located warehouses that help fill orders quickly — sat empty at the end of July, as the company struggled to pay its suppliers and orders slowed below the typical summer lull, people familiar with the matter said.

Getir was also months late paying suppliers, resulting in numerous perishable goods being unavailable in the German capital on its app, according to some of the people. Germany’s general manager, Clemens Koebele, acknowledged on a separate call on Tuesday that there had been problems paying suppliers this summer that have since been resolved and deliveries are resuming, people said.

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Every department in Germany would face staff reductions and Getir will provide services to fewer cities as part of the restructuring, according to accounts of the call. 

A Getir spokesperson declined to comment beyond the company’s statement on restructuring. 

Getir was founded in 2015 to offer grocery delivery and grew rapidly when consumers were stuck inside during pandemic-era lockdowns. It has raised around $1.8 billion in seven funding rounds, according to CrunchBase data. Less than a year ago, the company acquired Gorillas, a competitor with a strong presence in Germany and the UK that had boomed during the pandemic in a deal that valued the business at $1.2 billion, people familiar with the matter said at the time. 

Its German operation has already reduced hours for warehouse staff and riders. One of the company’s managers told warehouse workers in Berlin’s Friedrichshain district that the business was receiving less than half of the typical number of orders in the last several weeks, and said that would result in fewer shifts, according to a WhatsApp message viewed by Bloomberg. 

The company is seeking to sublet space at the trendy office in a former brewery that it inherited from Gorillas, according to some of the people. 

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Getir’s valuation was slashed earlier this year to $6.5 billion in a down round led by Mubadala that raised about $500 million, Insider reported in April, citing unidentified people familiar with the deal.

Quick commerce companies attracted nearly $10 billion of venture capital in 2021, according to PitchBook Data Inc., as pandemic-era lockdowns and cheap funding contributed to sky-high valuations. The industry, along with restaurant delivery apps like Deliveroo Plc and Delivery Hero SE, has since been forced to focus on cost-cutting and profitability as rising inflation and economic uncertainty hobbled investment.

Some details of the latest dismissals were reported by the Insider on Monday, citing unidentified people familiar. 

–With assistance from Gillian Tan.

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