Discussions come as consolidation accelerates in one of the pandemic’s hottest tech sectors.
As Financial Times reports, Getir is in talks to take over its lossmaking German rival Flink, according to people familiar with the deal, as consolidation accelerates in one of the pandemic’s hottest tech sectors.
The discussions between the two European groups are continuing and there is no guarantee of an agreement being reached, the people said.
Flink is one of Europe’s last remaining independent grocery delivery groups after a wave of consolidation over the past year, as capital-intensive businesses have fallen out of favour with investors given rising interest rates and the risk of a looming recession.
Founded in Berlin in 2020, Flink in January said it expects its core German business to be profitable by the end of 2023, after hitting €400mn in sales in 2022. The entire business, including subsidiaries in France and the Netherlands that launched last year, would be profitable by the fourth quarter of 2024, it added.
Both Getir and Flink share a common investor in Abu Dhabi sovereign wealth fund Mubadala Investment Company.
Flink is reportedly facing a challenging situation and has decided to lay off 8,000 employees, which accounts for 40% of its workforce. According to manager magazin, the job cuts were made necessary by difficult market conditions and rising prices since April last year, prompting the need to revise its cost structures and focus on profitability.
The company has confirmed the layoffs, stating that positions will not be filled after employees resign or are dismissed. The layoffs are expected to impact all areas of the company, except for the tech department, which is said to have seen an increase in hiring.
In addition to the layoffs, Flink is also reportedly seeking additional funding to address its financial challenges. Insiders claim Flink, is looking to raise 200 million euros, with half of the amount already promised. As reported by Financial Times, Flink is attracting around $100mn of funding from its existing investors at a valuation of more than $1 bln, according to people familiar with the effort.
That would mark a comedown from late 2021, when the firm raised $750mn of financing at a $2.1bn valuation, before taking the new funding into account.
After more than a dozen rapid grocery apps – which promised to deliver groceries and convenience-store items in as little as 10 minutes – launched in the US and Europe by mid-2021, only a handful of players now remain.
Several smaller rapid delivery apps have either sold or pivoted their business models. In 2021, Getir acquired Weezy while Gopuff bought Dija (now Gopuff) and Fancy (now Gopuff) and DoorDash invested in Germany’s Flink.