Berlin-based on-demand grocery delivery startup Gorillas has just raised a whopping €245m in a Series B, bringing the company’s valuation to $1bn only nine months after launching. No German startup has ever achieved this feat.
The raise comes just three months after investors plugged €36m into the startup and amid an absolute funding frenzy for ‘Q’, or quick commerce, startups.
The latest investment is led by repeat investor Coatue Management, DST Global and Tencent.
Gorillas, which says it can deliver groceries to customers’ doorsteps within 10 minutes, is also selling a big vision. Like its competitors, it’s seeking to totally transform how we buy groceries, edge out the supermarket incumbents and transform the food supply chain all at the same time.
We have a simple goal: to change the game in the grocery retail market.
“We have a simple goal: to change the game in the grocery retail market, which has been slow to implement new and speedier technological solutions. By effortlessly enabling immediate access to fresh and healthy food at retail prices, we essentially simplify the process of doing groceries,” says Kağan Sümer, CEO and founder of Gorillas, in a press release.
Gorillas is now active in more than 12 cities: several in Germany, including Berlin and Munich, as well as London and Amsterdam. It has opened more than 40 ‘dark stores’, from which its army of drivers pick up orders for customers.
Its main competitor in Germany is Flink, which has raised $64m to date — despite only launching operations nine weeks ago. Flink also delivers groceries in under 10 minutes, and is operational in eight German cities.
Meanwhile in London, Gorillas faces much fiercer competition. Local player Weezy launched in July 2020, while in recent months Turkish operator Getir and London-based Dija and Jiffy have also kicked off operations in the city.
Residents of certain London neighbourhoods can currently enjoy some chunky discounts from each app as a result, as the marketing wars hot up.
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Just about every VC in Europe is paying close attention to the scene at the moment. Creandum, Index, Blossom, Northzone, Cherry, Heartcore and Target Global are amongst the well-known funds which have backed speedy grocery startups.
According to recent statistics from Dealroom, €262m was raised in the first quarter of 2021 by Q-commerce grocery delivery companies — most of them barely a few months old.
Every single VC is rushing to make a bet in the category.
“Every single VC is rushing to make a bet in the category,” Yacine Ghalim, partner at Heartcore and an investor in Weezy, told Sifted earlier this week. “I’ve never seen that before.”
That means it’s likely to be pretty easy for most players to raise further investment — and we’re likely to see many more operators spring up across Europe.
“Startups wouldn’t have been able to raise so much follow-on investment without this craze — but it has attracted competition faster as well,” says Ghalim.
“There’s supply and demand — supply for funding, demand for companies wanting to grab that funding. It really accelerates things.”
With its latest funding, Gorillas plans to expand into 10 countries and 50 cities, including New York and Paris. There it will join local competitor Cajoo, which launched in February 2021 and is relatively poorly financed by comparison, with €6m raised to date.
It will also invest in its technology although, arguably, this is a sector which will be won by whichever companies can nail their operations and expand fastest.
“Execution, speed, opening new hubs quickly and customer satisfaction” are what will differentiate startups, says Cherry Ventures partner Christian Meerman, an investor in Flink.
It is a bit of a land grab game.
“It is a bit of a land grab game,” he adds. “You can probably have two to three players in a city.”
Following the Series B, Gorillas plans to give $1m to its community of over 1k riders and its staff working in dark stores.
The startup also claims that, unlike other gig economy models, its rider ‘community’ benefits from employment contracts as well as a career development programme.
However, not all is as good as it seems.
In response to supposedly poor working conditions, some of Gorillas’ discontented riders are teaming up under the Gorillas United initiative, a union of sorts, to protest against working conditions, reported BusinessInsider.
Today, the Twitter account revealed that a rider was fired yesterday for proposing a workers’ council.
Another rider, who posted about his colleague getting fired on Twitter, was also fired. Yesterday, he held a socially-distanced protest, among others, in front of Gorillas at Muskauer Strasse in Kreuzberg.
His social media post wrote: “If people start with their doubts about the reasons why I was fired, please ask Kağan Sümer and Felix Chrobog as I’d like to know myself having been fired for no reason.”
Miriam Partington is Sifted’s Germany correspondent. She tweets from @mparts_.
Amy Lewin is Sifted’s deputy editor. She covers VC, foodtech and diversity in tech, and tweets from @amyrlewin.