A courier for the German food delivery start-up Gorillas, which wants to deliver an order in Berlin on July 8, 2021.
Tobias Schwarz | AFP via Getty Images
LONDON – German grocery delivery company Delivery Hero has invested $ 235 million in Gorillas, an online grocery start-up, as part of a $ 1 billion funding round.
Gorillas was founded in May 2020 but has grown rapidly as the demand for its service, which gets food to people’s doors in just 10 minutes, has increased during the coronavirus pandemic.
It is one of several European startups competing in an increasingly dense space. Rivals include Turkish company Getir, British company Zapp and German peer Flink.
Delivery Hero claims to have led Gorillas’ latest financing round and now holds an 8% stake in the company. Tencent, Coatue, DST and Dragoneer also invested.
Delivery Hero is one of the largest online food delivery platforms in Europe and competes with providers such as Deliveroo and Just Eat Takeaway.com. It has its own ambitions to be successful in the quick delivery of groceries as it has opened several “dark stores” for deliveries only in different countries.
Gorillas is now valued at $ 3.1 billion after the cash injection, a sharp drop from the $ 6 billion market value the company reportedly aimed for earlier this year.
The company was also in talks with American grocery supplier DoorDash about an investment, but those talks failed, according to various reports.
Gorillas declined to comment on the reports when asked about them by CNBC.
“Delivery Hero has a mission to promote fast trade worldwide and we see Gorillas as one of the market leaders in Europe and the US,” said Niklas Östberg, CEO and founder of Delivery Hero, in a statement on Tuesday.
“The Gorillas team is exceptionally customer-focused and has the highest customer retention rates we’ve seen in the industry.”
Delivery Hero shares rose more than 1% on Tuesday morning.
Gorillas says it now has a run rate of $ 300 million, which means it expects to make that much revenue annually. For a company that is only a little over a year old, this is no easy task.
However, it remains to be seen whether gorillas can maintain their wild growth once the Covid-19 restrictions are lifted. The company has now also faced the anger of delivery couriers protesting against unfavorable working conditions.