The pandemic-fueled surge in online food and grocery delivery services led to the emergence of six known billionaires, but now, four of them have seen their billionaire status vanish, according to the Bloomberg Billionaires Index. Founders of companies like Getir in Turkey, Just Eat Takeaway.com in Amsterdam, and Instacart and DoorDash in Silicon Valley have collectively lost over $15 billion in total wealth.
Investors poured significant capital into these delivery businesses during the pandemic, capitalizing on increased consumer demand for at-home deliveries. However, as the world gradually reopens and demand softens, the valuations of these companies have been slashed, forcing founders to confront new challenges.
Matthias Schu, a lecturer at the Lucerne School of Business, emphasized the unrealistic expectations that accompanied the exceptional growth rates of these companies, saying, “The fact that high annual exceptional growth rates have been an exceptional phenomenon and cannot be maintained at the same level over years should have been clear from common sense alone.”
Before its initial public offering in September, Instacart had already listed the pandemic as a risk factor. Similarly, Just Eat Takeaway’s Jitse Groen acknowledged the business’s sensitivity to Covid trends, and DoorDash’s Tony Xu highlighted the complexities of the post-pandemic e-commerce environment.
Nazim Salur, the founder of Getir, experienced a substantial decline in his fortune after Getir’s latest funding round reduced the company’s valuation by nearly 80%. Despite expanding into new markets during the pandemic, Getir reported a $529 million loss in 2021. It spent $1.2 billion in 2022 to acquire the German competitor Gorillas Technologies but later retreated from several European countries earlier this year. The Turkish market remains its only profitable unit, and the company announced plans to cut over 10% of its global workforce.
Instacart, which was valued at up to $39 billion in March 2021, went public in September 2022 at a quarter of that valuation. DoorDash’s share price has declined by over 60% since November 2021, affecting the billionaire status of its co-founders. Just Eat Takeaway’s Groen has also seen a significant reduction in his fortune as the company’s share price plummeted.
This trend isn’t limited to Western markets; it’s also impacting emerging markets like India and China. Indian startup Swiggy faced a halving of its valuation in May, while Dunzo has struggled to raise funds and meet payroll obligations. In China, Missfresh Ltd.’s market capitalization fell below Nasdaq’s minimum requirement in July, and the company is striving to avoid delisting.
While these delivery giants once soared on the wave of pandemic demand, they now face the challenge of maintaining their relevance and profitability in a post-pandemic world.