Embattled ultrafast delivery provider Gorillas, which has operations in New York City as well as several European markets, could be rescued by another firm facing its own pressures.
Reports indicate that Getir, an Istanbul, Turkey-based delivery service with global operations, could buy Gorillas in a cash and equity deal, according to Bloomberg. The Financial Times said the deal would provide Berlin, Germany-based Gorillas shareholders approximately $100 million in cash and 12% of the combined entity.
Getir would gain a foothold in the U.K. market as part of the deal.
In March, Getir raised $768 million that valued the company at about $12 billion, but it too has faced global pressures as the ultrafast delivery market has contracted from its pandemic highs. In May, Getir announced it was laying off about 14% of its global workforce, which numbered more than 32,000.
The instant delivery market has been hit by layoffs and companies pulling out of markets in 2022. Jokr, which quickly expanded in the U.S. in 2021, pulled out of the country entirely this year, and Gopuff, with a valuation above $15 billion, closed or scaled back operations at 22 of its U.S. warehouses and cut about 3% of its workforce.
Earlier this year, ultrafast delivery startups 1520, Buyk and Fridge No More all shut down.
Gorillas has been leaving or shrinking operations around the world as it has burned cash and failed to achieve profitability. The company, founded in 2019, expanded quickly during the pandemic, but after opening more than 100 dark stores in Europe and the U.S., the company was forced to retreat on its plans.
In May, Gorillas announced it would lay off 500 employees, representing about half of its office workforce. At the time, the company said it would refocus efforts on five key markets, including the U.S.
“With this focus comes a change in staffing needs,” a blog post read at the time. “We thoughtfully and carefully looked at our teams against our focused business objectives and have decided with a heavy heart to adjust the size of our global workforce. In line with the focus on our new key priorities, on our core European markets and on our path to profitability, nearly 300 team members of our global office workforce will be leaving Gorillas.”
It added that it was exploring “all possible strategic options.”
Just this week, a class action lawsuit was filed in New York accusing Gorillas of failing to pay its delivery workers properly. The suit, with lead plaintiff Francis Coleman, said the company sent employees home without pay on slow days and failed to pay standard wages as required by law.
In 2021, DoorDash was reportedly interested in acquiring Gorillas, but a deal never materialized. Gorillas did acquire Frichti in France earlier this year before operations started turning negative.
Click for more articles by Brian Straight.
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