Getir is in advanced talks to acquire rapid grocery rival Gorillas. The proposed deal – which, if completed, would be the biggest in the q-commerce sector to date – would be a mix of cash and equity, according to sources familiar with the matter cited by Bloomberg.
The Grocer has confirmed acquisition discussions are underway with a source with knowledge of the matter. Gorillas has spoken to several companies about being acquired over the last year without making a deal, the source added. It is understood another rapid grocery player is also considering a move to acquire Gorillas.
The potential acquisition – Bloomberg reports the deliberations may not result in a transaction – comes at a time when the q-commerce sector is focused on a ‘path to profitability’ rather than the hypergrowth that characterised their previous strategies.
Both companies have reduced headcounts this year – Getir in May reduced its global headcount by 14% due to “rising inflation and the deteriorating macroeconomic outlook”. Gorillas that month laid off half of its Berlin headquarters workforce, and announced it was pulling out of Italy, Spain, Denmark and Belgium as it “intensifies the shift to long-term profitability”.
Despite having raised huge sums in investment through 2021 – Gorillas secured close to $1bn in a funding round in October last year – according to rapid grocery expert Brittain Ladd: “the cash burn rate at Gorillas was the highest I’ve ever seen in any industry from any company”.
Getir has also been raising investment cash, in March securing nearly $800m in new funds. The company claimed at the time revenues had increased more than fourfold last year.
“It is tough to say whether this is a sound strategy,” said Nishant Shrikhande, senior e-commerce analyst at Kantar of the potential acquisition, “but it is the strategy of a company that believes it can outlast the inflationary environment of the next few years and come out profitable.”
Jiffy’s former head of delivery operations and now q-commerce consultant Quaid Combstock said an acquisition would allow Getir to increase the density of orders in an area, and so improve the chances of profitability.
“If Getir were to acquire Gorillas, they would in turn acquire their customers and volume,” Combstock said. “This would enable them to increase their order density. Gorillas and Getir share six global markets, so they can reduce the competition in favour of more profitable co-operation.
“There are too many players in the market and there needs to be some focus on M&A to make the market sustainable,” he added.
A Getir spokeswoman told The Grocer they could “neither confirm nor deny” acquisition talks were underway. A Gorillas spokeswoman said “we do not comment on market rumours”.
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