Istanbul-based grocery delivery firm Getir is in the process of securing a substantial $500 million investment, marking a remarkable turnaround for the company that was valued at nearly $12 billion in early 2022.
Sources familiar with the matter have revealed that Getir's current valuation, taking the new capital injection into consideration, stands at $2.5 billion. This is a substantial decrease from its previous valuation of up to $11.8 billion when it last raised funds in early 2022.
The impending equity funding round, scheduled to conclude later this month, boasts participation from existing shareholders, including the Abu Dhabi wealth fund Mubadala Investment Company, venture capital group G Squared, and the esteemed investor Michael Moritz. Notably, Michael Moritz, with nearly four decades of experience at Silicon Valley giant Sequoia Capital, recently embarked on a new journey.
This funding round for the Istanbul-based firm underscores the challenges faced by startups and investors in today's venture capital landscape, characterized by significantly reduced valuations in order to secure fresh investments. This trend is exemplified by Getir's move to raise funds at a considerably lower valuation.
Interestingly, this news follows the recent sale of assets by London-based virtual conferencing startup Hopin, which had been valued at $7.8 billion in mid-2021. Hopin sold its flagship events platform to RingCentral in a deal worth up to $50 million.
Founded in 2015, Getir emerged as one of the leading players among the numerous delivery app companies that collectively raised over $5 billion during the pandemic to cater to the surging demand for grocery and essential item deliveries. It is worth noting that most of its competitors have either been acquired or ceased operations as consumer preferences shifted post-lockdowns.
Despite the significant reduction in its valuation, Getir's ability to secure substantial funding reaffirms the advantage enjoyed by more established companies in raising capital, even during challenging market conditions. This development underscores the confidence that investors have in Getir's potential to generate profits.
Getir's strategy has been geared towards consolidating its position in the rapidly evolving grocery delivery sector. This was evident when the company successfully concluded its acquisition of Berlin-based rival Gorillas in a deal valued at $1.2 billion, resulting in a combined entity worth $10 billion.
Additionally, Getir engaged in discussions to potentially acquire its German counterpart, Flink, which remains one of the few remaining independent grocery delivery firms in Europe. In this sector, among the only other freestanding private entities are the UK's Zapp and US-based Gopuff.
After an extensive global expansion, Getir has now chosen to streamline its operations, focusing primarily on five key countries: Turkey, the UK, Germany, the Netherlands, and the US. This shift represents a strategic pivot away from the earlier phase of rapid, but capital-intensive, growth.
An insider remarked, "We've turned a chapter on excessive growth and excessive capital commitments," highlighting how the rapid grocery delivery sector has come to symbolize the era of extravagant expansion.
Across the startup landscape, companies have encountered mounting challenges in securing fresh investments over the past year. Factors such as rising interest rates and worsening economic conditions have dampened the appetite for riskier investments, following a surge in tech dealmaking driven by the pandemic.
Global venture capital funding for startups witnessed a decline of more than 50 percent in the 12 months leading up to March.
The forthcoming initial public offerings of UK chip designer Arm and US grocery delivery service Instacart are anticipated to provide valuable insights into market sentiment. Several prominent private tech companies from Silicon Valley are also reviving long-delayed plans to go public.
When contacted for comments, representatives for Getir, Mubadala, Michael Moritz, and G Squared declined to provide additional information.
