Scramble for booming delivery market is the order of the day
Can these companies, many of which are just starting out, sustainably turn a profit?
In New York, London and other big cities, a new breed of couriers with names such as Gorillas, Getir and Gopuff is promising to have basic groceries — bananas, six-packs of beer, Doritos and such — at your front door in as little as 10 minutes.
For venture capitalists on the prowl for businesses that might benefit from a lockdown, these ultrafast grocery deliveries were an obvious outlet. In 2021 alone, investors pumped $3bn into 13 such startups — an eightfold increase in cash from the previous year. Getir’s July valuation of $7.6bn means it’s worth more than Macy’s or Nordstrom.
But can these companies, many of which are less than two years old, sustainably turn a profit? In search of an answer, Giles Thorne, an equity analyst at Jefferies Financial Group in London, and his team spent a week sitting outside a “dark store” operated by Getir. Unlike a delivery service such as Instacart, which sends its couriers into nearby supermarkets, rapid grocery deliveries come from locations the startups themselves operate—usually small warehouses located away from the high rents of Main Street...