Turkish grocery delivery firm Getir closes deal with rival Gorillas

Turkish fast delivery company Getir has closed its acquisition of German rival Gorillas in a deal that values the combined group at $10 billion, according to the Financial Times on Friday.

The deal values the Gorillas at around $1.2 billion, down from $3 billion mooted in September last year, according to people familiar with the matter.

Getir and Gorillas didn't respond immediately to Reuters' request for comment.

The FT also said that job cuts would be expected as part of the deal because of the overlap between the two companies' network of small urban warehouses.

The German grocery delivery app Gorillas, founded in 2020, has tripled the size of its business since last year when it raised 860 million euro $907 million, but has not been profitable due to an uncertain economic outlook.

Gorillas said in June it expected to be profitable at a group level within 12 months. The company had previously said it would lay off 300 employees, halving its administrative staff as it moved its focus from rapid expansion to turning a profit.

The Turkish company is also cutting its own value by around a quarter, and Getir is hoping to raise more funding early next year, according to the report.

Getir closed a $768 million funding round earlier this year, led by Abu Dhabi state investor Mubadala, who valued the company at around $12 billion.

The model for rapid grocery deliveries comes with high costs as companies have to pay thousands of riders and logistic centres across cities to get crisps, milk, pasta, and other items to customers quickly.

Competition has been fierce and analysts are concerned that growth will slow down as consumers are squeezed by inflation and pre-pandemic shopping habits return.