Getir, the pioneer of ultrafast grocery delivery, has acquired New York City-based online grocery company FreshDirect from Ahold Delhaize USA, the largest grocery retail group on the East Coast.
Operational in Turkey, the UK, Germany, France, Italy, Spain, Netherlands, Portugal and the US, this is the company's fifth acquisition.
It most recently acquired fellow grocery delivery company Gorillas for €1.2 billion, giving the combined group a valuation of $10 billion. The amount it spent on FreshDirect has not been public, although it's likely to be sizable, with the company previously raising $280 million in funding. Other companies acquired by Getir include Blok (Spain), Weezy (UK) and Frichti (France).
Getir has raised $1.8 billion in funding and was previously valued at $11.8 billion. However, according to a report filed in September this year, this valuation is drastically reduced, claiming the company was raising $500 million at a valuation of $2.5 billion.
The acquisition emphasises Getir's strategic ambitions to grow in North America, where it competes with well-funded established players such as Instacart with $2.9 billion in funding, and DoorDash, which has raised $2.5 million.
A rapidly right-sizing market
2022 saw a 68 percent decrease in the amount invested in delivery startups compared to 2021. In May 2022, Getir cut 14 percent of its staff globally. In July this year, the company announced it was pulling out of Italy, Spain, and Portugal.
Rising food prices have hard hit the last-mile food delivery sector, and the consequences of rapid expansion, neighbourhood warehouse closures, and challenges to labour breaches.
All of this affects the already narrow profit margins. In addition, many consumers report that rapid delivery has become half-hour delivery across the sector — a levelling out of expectation vs reality.
FreshDirect will leverage Getir's technology and operational footprint to offer faster services. It will also enable Getir to further increase the quality and breadth of its product range, especially regarding fresh products, making it even more attractive to its New York customers.
Lead image via FreshDirect.