(Bloomberg) -- Getir, once a darling of the delivery startup world valued at $12 billion, is weighing asset sales and potential exits from non-core markets as it faces pressure from investors to cut its losses.
The Turkish grocery delivery company, which saw business skyrocket during the Covid-19 pandemic as deliveries surged, is now exploring options including selling off or shuttering assets around the world, people familiar with its situation said. Any potential sales would exclude its core Turkey operations, said the people, who asked not to be identified discussing private negotiations.
Getir last year bought the US grocery delivery company FreshDirect and also operates in the UK, the Netherlands and Germany. Demand for its services subsided as the world emerged from Covid lockdowns, and the company has been burning through as much as $50 million a month, people familiar with the situation said. Backers are now seeking a major restructuring, they said.
Getir’s investors include Abu Dhabi sovereign wealth fund Mubadala Investment Co., Tiger Global and Sequoia Capital, which poured money into the startup when customers were stuck at home during pandemic-era lockdowns. Founder and Chief Executive Officer Nazim Salur’s ambitions to build and list a global operator akin to Uber Technologies Inc. helped fuel competition that cut some grocery delivery times to 15 minutes or less.
Getir declined to comment. Investors including Sequoia and Tiger Global didn’t immediately respond to a request for comment.
Read More: Getir’s Late Bills, Staff Cuts Show Delivery’s European Decline
Advisers Alix Partners are expected to present restructuring options to Getir and its investors within two weeks, the people said, adding that discussions are ongoing and no final decisions have been made. Job cuts will likely depend on whether operations are sold or shuttered, they said.
Getir has simultaneously been in merger discussions with a German rival, Flink SE, Bloomberg reported Wednesday. Mubadala is also an investor in Flink.
Sky News earlier reported some details of the options Getir is exploring.
Investors have plowed more than $2 billion into Getir to date, according to PitchBook. Getir shut its divisions in several European markets last year and then cut more than 10% of its remaining global workforce after at times struggling to meet its bills. The company most recently raised $500 million in September at a $2.5 billion valuation.
Should Getir shutter in Europe, fewer than half of the rapid grocery startups that boomed in the region during the pandemic would remain. Getir itself was responsible for some dealmaking in the sector, acquiring German rival Gorillas Technologies GmbH in 2022 and Weezy in the UK the previous year.
These companies offered a limited selection of groceries through apps, shipping out products from small urban warehouses via couriers on mopeds or bicycles.
The idea was that consumers might be willing to pay more for convenience and speed, boosting margins above the typical 4% or 5% seen in grocery retail. But the high costs of labor and operating urban warehouses, combined with consumer unwillingness to budge on price always meant this was unlikely, according to Ruth Lewis, senior manager and retail specialist at Bain.
“The best-case scenario would have been breaking even,” she said, adding that online grocery shopping represents a small percentage of e-commerce. “This model would be a small chunk of that small chunk.”
Getir and its peers also face competition from well-established delivery companies expanding into groceries, such as Uber Eats, Just Eat Takeaway.com NV and Deliveroo Plc, she added.
(Updates with additional details throughout)
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