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Turkey-based grocery delivery company Getir has raised $500 million in a deal that has seen the stock price of one of the hottest startups during the pandemic less than a quarter of what it was 18 months ago.
Taking into account the new funding, Getir’s latest investment would value the company at $2.5 billion, according to people familiar with the matter. When it raises funds in early 2022, it will be valued at a whopping $11.8 billion.
The new equity funding round, expected to close later this month, is being led by existing shareholders, including Abu Dhabi wealth fund Mubadala Investment Company, venture capital group G Squared and prominent investor Michael Moritz, The latter recently left Sequoia after nearly 40 years at the Silicon Valley firm, the people said.
The Istanbul-based company’s funding round is another sign of how a prolonged downturn in the venture capital market is forcing startup founders and investors to accept dramatically lower valuations to raise fresh money.
Just a month ago, London-based virtual conferencing startup Hopin, valued at $7.8 billion in mid-2021, sold assets including its flagship events platform to RingCentral in a deal worth as much as $50 million.
Founded in 2015, Getir has become one of the largest of a dozen delivery app companies that collectively have raised more than $5 billion to deliver groceries and other essentials during the pandemic. Most of its rivals have been sold or closed as consumer demand shifts after lockdowns ease.
Despite the sharp drop in valuation, Getir’s new funding round is the largest of its kind this year. The financing highlights the strength of more established companies in raising capital, and the confidence investors have in their profitability, even under challenging conditions.
Getir is trying to consolidate competition in the fast grocery delivery space after a flood of competitors emerged during the pandemic. In December, the company completed the acquisition of Berlin-based rival Gorillas for $1.2 billion, valuing the combined group at $10 billion.
Earlier this year, it also held talks to acquire German rival Flink, one of the few remaining independent grocery delivery groups in Europe. The only other independent private companies in the industry include Zapp in the UK and Gopuff in the US.
After rapidly expanding globally, Getir is now exiting multiple markets and focusing its operations on five countries: Turkey, UK, Germany, Netherlands and US.
“We’ve turned the page on overgrowth and overcommitment of capital,” one of the people said, adding that the fast-track grocery delivery industry is “evidence of an era of excess.”
All start-ups have faced challenges raising new funding over the past year as rising interest rates and deteriorating economic conditions dampened interest in venture capital amid a pandemic-driven surge in tech deals.
Global start-up venture capital funding plummeted by more than 50% in the 12 months to March.
The upcoming initial public offerings of British chip designer Arm and U.S. grocery delivery service Instacart will provide a fresh gauge of market sentiment, with Silicon Valley’s largest group of privately held tech companies restarting long-delayed stock listing plans.
Representatives for Getir, Mubadala, Moritz and G Squared declined to comment.
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