Getir, the fast grocery delivery company that flourished during Covid lockdowns, said it would end its operations in the United States and Europe, a major setback from another pandemic darling.
The company, which aimed to deliver groceries and other small conveniences in as little as 10 minutes, said it would refocus on its home base of Turkey. At its peak, the privately held company Getir was valued at nearly $12 billion after expanding rapidly, buying up competitors and operating in nine countries.
The company announced the decision in a brief statement on Monday, adding that FreshDirect, its US subsidiary, would continue operations.
“Getir generates only 7 percent of its revenue in the markets from which it exits,” the statement said. “This decision will allow Getir to focus its financial resources on Türkiye.”
Getir was all about speed. Dressed in purple and yellow suits, Getir workers cycled through cities in Britain, Germany, the Netherlands and the United States, including New York and Chicago. The company's expansion was rapid: until 2021, Getir operated only in Türkiye. Within a year, I was in six European countries. Its rating increased… to $11.8 billion in 2022 from less than $3 billion a year earlier.
It took over rivals, such as the Spanish company Blok in mid-2021, just five months after its founding. It also bought better-known brands such as Weezy in Great Britain and the German firm Gorillas. In 2021, Nazim Salur, founder of Getir, said the company's expansion was “a race against time” before competitors caught up.
Prior to its European expansion, Getir had built a stable business in Turkey for more than five years with operations in all major cities. The company's international rise was fueled by a number of factors that turned out to be temporary.
Despite the grocery delivery industry's inability to find sustained profitability, money poured in from venture capitalists amid low interest rates. Pandemic lockdowns had conditioned consumers to use more delivery services while stuck at home. And Getir used deep discounts to attract customers.
But all this began to relax after the confinements. Central bankers aggressively raised interest rates starting in mid-2022 to quell high inflation. Suddenly, consumers had less disposable income as they dealt with the higher cost of living. And the return to socializing (and the simple freedom of going to a convenience store) meant that fewer people were willing to pay a premium to have some groceries delivered to their door.
Other companies that flourished during the pandemic, such as Peloton and Zoom, also faced a reversal of fortune after lockdowns ended.
Last July, Getir closed its businesses in Italy, Spain, Portugal and France. In September, the company's valuation dropped to just $2.5 billion. The Financial Times reported. Getir was then raising money during a broader downturn for venture capital-backed technology companies, a downturn in which thousands of private companies folded as investors stopped funding so many companies based simply on promises of success.
The completion of Getir's withdrawal to Turkey is expected to result in the loss of thousands of jobs. Unlike other delivery companies, Getir hired its delivery drivers and warehouse staff as employees, offering them paid vacations and pensions. In August, The company reportedly had around 23,000 employees.But there have already been some layoffs after the company began pulling out of European cities late last year.
