Speedy grocery giant Getir is set to announce the acquisition of competitor Gorillas in an all-stock deal — a deal that includes Gorillas investors injecting a further $100m into the speedy grocery delivery company to get it over the line, according to two sources familiar with the deal.
It would mark a change from the previously reported terms of the deal to make it even less favourable for the German startup's investors. Previous reports had suggested that the deal would give Gorillas’ shareholders single-digit equity in Getir and $100m in cash.
For Gorillas’ investors, an all-stock deal would mean they don’t receive any money and would convert their Gorillas shares into Getir ones — making any potential return on their investments contingent on the fate of their Getir shares.
“(All-stock deals) are seen very often when there's a failing business and the business is being absorbed by somebody but they’re not willing to pay anything for it,” one investor in a third speedy grocery company tells Sifted.
The rise and fall of Gorillas
Berlin-based Gorillas was valued at $3bn at its last funding round in September 2021; Turkey-headquartered Getir was last valued at $12bn at its most recent funding round in March.
Given recent market fluctuations, it’s likely that Getir is worth considerably less than that $12bn price tag today. If the deal prices Getir’s shares at the price of the company’s latest valuation, it means Gorillas’ investors are receiving the equity at an inflated price.
This means they will receive less ownership of the company than they would have got at a lower valuation — and means they could get burned if Getir raises at a lower valuation in the future.
The deal caps off a tumultuous year for Europe’s speedy grocery industry, which has seen a wave of layoffs and market exits. Gorillas itself shut down its operations in Italy, Denmark, Spain and Belgium in May.
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It’s in sharp contrast to 2021, when the industry enjoyed an influx of VC funding — $7bn globally according to Pitchbook data — causing company valuations to soar.
Gorillas was founded in 2020 and quickly gained financial backing from a roster of top investors such as Coatue, DST Global and G Squared. Sifted analysis of the company’s cap table shows US firm Coatue owns the largest stake, followed by Atlantic Labs and then Kagan Sümer — the company’s founder.
It’s unclear whether Sümer will stay on board once Getir swallows up Gorillas, or how secure Gorillas employees' jobs are.
Getir, which was founded in Turkey in 2015, is the best capitalised of Europe’s grocery startups. It's raised $1.8bn in funding from investors including Tiger Global and Sequoia.
The primary motivation for Getir to buy Gorillas, say sources close to the speedy grocery industry, is to get hold of its dark stores — a valuable asset in cities like Paris and Amsterdam where local governments are looking to prevent any more from opening and even shut down existing sites.
Sifted has contacted Getir and Gorillas for comment.
Tim Smith is Sifted’s Iberia correspondent. He tweets from @timmpsmith Miriam Partington is Sifted’s DACH correspondent. She tweets from @mparts_ Freya Pratty is a reporter at Sifted. She tweets from @FPratty.