Getir faces reality. Here’s why exiting Europe and retreating back to home country of Turkey is a smart move
Getir is set to announce this week that it is withdrawing from the UK, Germany and the Netherlands.
According to a Sky News report, thousands of jobs will be put at risk, including approximately 1,500 in the UK. The move could involve a sale of its assets or an insolvency procedure, insiders said.
It would leave Getir with operations in the US and Turkey only, although the ultimate aim is to operate solely in Turkey, where it was founded.
It’s a good move, according to Brittain Ladd, as supply chain consultant and former Amazon executive.
In a LinkedIn post, he noted that, in December 2023, Getir announced the acquisition of FreshDirect, an online grocery retailer in New York City.
“I was immediately sceptical of the announcement due to Getir's cash burn rate of Euroe 50 million monthly, and their dwindling cash pile. Something was amiss. There was. Getir did not "acquire" FreshDirect, it was paid to take over FreshDirect.”
He added: “Getir is a company that does a better job of writing glowing press releases about themselves than growing their business. In 2022, Getir, which has raised over $1 billion, was valued at $12 billion by its investors Tiger Global Management, Sequoia Capital, and Mubadala.”
“I stated in multiple posts that the valuation was false and that it was only worth between $1 billion to $3 billion. Note: The individuals who approved the investments in Getir should be fired.”
“I also stated in posts that Getir would go out of business in 2024 or 2025 unless it exited all of Europe, including the UK and Germany, and retreated back to its home country of Turkey.”
Getir, however, chose to keep expanding its operations and maintained a multi-million pound sponsorship deal with Premier League club Tottenham Hotspur. It acquired Gorillas and hinted that it was trying to merge with the German rapid grocery delivery company Flink.
The opportunity to be paid $151 million by Ahold Delhaize to take over FreshDirect and also receive a $30 million investment from Ahold Delhaize, was too good to turn down.
According to Ladd, senior executives viewed the cash as a lifeline and also an opportunity to convince their investors to view Getir as, “a growing major player in groceries in the largest city in the USA," according to a source.
It didn’t work. Getir is under "intense pressure" from investors to reduce costs and cash burn rate.
And it now has no choice but to face up to reality, Ladd believes. The company must exit Europe and end the sponsorship agreement with Spurs.
It must also either divest FreshDirect or give it away.
Ladd said: “Ahold Delhaize tried to divest FreshDirect for several months but couldn't find a buyer. I can make the argument that Amazon should acquire FreshDirect and rebrand it as Amazon Fresh.”
“Trader Joe’s, who is extremely popular in NYC should assess an acquisition. Walmart could acquire the company and enter NYC. C&S Wholesale Grocers should acquire FreshDirect as it would look good to the FTC.”
He concluded: “In my opinion, I believe the company that would benefit the most from acquiring FreshDirect is Gopuff. I’ve been critical of Gopuff on several occasions.”
“However, the company’s founders, Yakir Gola and Rafael Ilishayev, have matured, and they’ve made several wise decisions that have made Gopuff a better company. I’m confident that Yakir and Rafael can succeed if they acquire FreshDirect and rebrand it as Gopuff.”
Getir did not respond to our request for comment.
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