Barely a year after Gorillas entered our country, the German startup based on on-demand deliveries announces its cessation of operations in Spain and the dismissal of 300 employees worldwide. In addition to Spain, Gorillas will also leave Italy, Belgium and Denmark. Rather, the company will focus «in increasing our presence in our core markets: Germany, the Netherlands, the UK, France and the United States, markets that account for 90% of our revenue and are clearly on the path to profitability».
However, in these marketsThe ones that Gorillas will stop betting on are not closed to possible agreements: “we are studying all possible strategic options for the Gorillas brand”underlined in a statement the Gorilla CEO Kagan Sumer.
The company run by Kagan Sumerannounced just a few weeks ago the milestone of having reached the 16 million orders spread all over the worldin its two years of life, since the Berlin-based technology company was born in May 2020.
Gorillas in numbers
In this time, Gorillas have launched into Germany, UK, France, Netherlands, Italy, United States, Denmark, Spain and Belgium, with a presence in more than 60 cities (such as Amsterdam, London, Paris, Madrid, New York, Milan, Berlin, etc.). In his 24 months of lifeGorillas has raised $1.3 billion, and has set up 230 last-mile micro-warehouses in 9 countries, in addition to having reached a workforce of 15,000 employees which will now be reduced by – for the time being – 300 workers.
Along the way, Gorillas has reached important sponsorship agreements that have given it worldwide visibility, such as the according to the Jumbo Visma team that will wear its logo in the next Tour de France, or the sponsorship of the PSG soccer team (a few months after the arrival of Leo Messi and in the middle of the soap opera Mbappé).
A market that only gives for 1 or 2 players
In a message that the CEO has made public to announce his decision, Sumer argued the circumstances surrounding the facts: “Two months ago, in March, the markets turned around, and since then the situation has only gotten worse. Very quickly, greed in the markets was replaced by caution. And tech companies, especially those with low or negative margins, are facing a very strong headwind.”
The result of this new reality is that wealth and money are being transferred to profitable low-risk businesses, “which will set in motion a process of natural selection in our e-commerce industry”, Sumer continued.
“Nine months ago, we realized what was coming and took steps to adjust our risk profile. We secured a $1 billion investment round and radically changed our focus from growth to efficiency.”
The Q-commerce industry can have a history as fast as the value it claims to provide precisely. In January 2020, there were a total of 30 players in the world qualified as Q-commerce or Delivery-on-demand. In January 2021 there were only 15 left (after the logical acquisition processes) and in January 2022 only the big ones remain: Glovo (now owned by Delivery Hero), Deliveroo (who has also left Spain), Gorillas and Getir, although Just Eat and UberEats could well be brought into this fight. “And now the stage of the Final Four begins, in which within a year there will only be 1 or 2 players left”, added the CEO of Gorillas.
To do this, Gorillas plans go through three immediate action pillars:
- We will increase our investments in our main markets: Germany, the Netherlands, UK, France and the US, where we get 90% of our revenues and are on a clear track record of profitability. For Italy, Spain, Denmark and Belgium, very attractive markets in their own right, we are exploring all possible strategic options for the Gorillas brand.
- We will focus on our customers and our brand.
- We will strengthen our global headquarters by refocusing our presence in Berlin, to our new office in Germany.