Getir valuation slashed to $2.5bn as delivery start-up raises new cash

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Getir, the Turkey-based grocery delivery company, is raising $500mn in a deal that prices one of the hottest start-ups of the pandemic at less than a quarter of its value 18 months ago.

Getir’s latest investment will value the company at $2.5bn, after taking the new money into account, according to people familiar with the matter. It had been valued at as much as $11.8bn when it raised funds in early 2022.

The new equity funding round, which is expected to close later this month, is led by existing shareholders including the Abu Dhabi wealth fund Mubadala Investment Company, venture capital group G Squared and prominent investor Michael Moritz, who recently left Sequoia Capital after almost 40 years at the Silicon Valley firm, these people said.

The Istanbul-based company’s round is another sign of how the extended downturn in venture capital markets is forcing start-up founders and investors to accept dramatically reduced valuations in order to raise new funds.

It comes just a month after Hopin, a London-based virtual conferencing start-up that had been valued at $7.8bn in mid-2021, sold assets including its flagship events platform to RingCentral in a deal worth up to $50mn. 

Founded in 2015, Getir became one of the largest of more than a dozen delivery app companies that together raised more than $5bn during the pandemic to deliver groceries and other essentials. Most of its rivals have already been sold or shut down as consumer demand shifted after lockdowns eased.

Despite its sharply reduced valuation, Getir’s new funding is among the largest such deals this year. The financing highlights the advantage that more established companies have in raising money, even in challenging conditions, and its investors’ confidence in its ability to generate profits.

Getir has sought to consolidate the competition in the rapid grocery delivery sector after a proliferation of rivals emerged during the pandemic. In December it closed its acquisition of Berlin-based rival Gorillas in a $1.2bn deal that valued the combined group at $10bn.

Earlier this year, it also held talks to acquire its German rival Flink, one of the few remaining independent grocery delivery groups in Europe. Among the only other freestanding private companies in the sector are the UK’s Zapp and US-based Gopuff.

After expanding rapidly around the world, Getir is now pulling back from several markets and has focused its operations in five countries: Turkey, the UK, Germany, the Netherlands and the US.

“We’ve turned a chapter on excessive growth and excessive capital commitments,” said one of the people, adding that the rapid grocery delivery sector was “exhibit A of the age of excess”.

Start-ups across the board have faced challenges in raising new money over the past year as rising interest rates and worsening economic conditions damped appetite for riskier investments following a pandemic-driven surge in tech dealmaking.

Global venture capital funding of start-ups had plunged by more than 50 per cent over the 12 months to March.

The upcoming initial public offering of UK chip designer Arm and US grocery delivery service Instacart are set to provide a new gauge for market sentiment, with a group of Silicon Valley’s biggest private tech companies dusting off long-delayed plans to list their shares.

Representatives for Getir, Mubadala, Moritz and G Squared declined to comment.