Gorillas looks to collaborate with large retailers to achieve profitability

Gorillas is seeking collaborations with large retailers in order to achieve profitability within 12 months.

The rapid grocery delivery firm was founded in Berlin 2020 and has since expanded to over 60 cities including London, Paris, New York and Amsterdam.

It has constructed more than 230 warehouses across nine countries as its service boomed during the pandemic when the quick commerce model became more popular.

Despite the popularity of the service, Gorillas  began slashing jobs last month and has started to review operations in Belgium, Italy, Spain and Denmark in order to conserve cash amid the cost-of-living crisis.

“We realised that, okay, we need to adapt, course correct and we have to do it fast, so there were really tough decisions and now the whole focus is actually going towards profitability,” Gorillas co-founder Ugur Samut said at last week’s Consumer Goods Forum Global Summit in Dublin.

Samut also spoke about the option of collaborating with large retailers, such as the “Tescos and Alibabas of this world”, to combine their buying power and higher margins with Gorillas’ technology and logistics.

“When you do that, actually the business becomes more sustainable, financially more sustainable,” he added.

Samut claimed 25% of the company’s distribution centres, warehouses known as ‘dark stores’, are now operating at a profit.

“We believe we will be operation profitable in three months and group profitable in 12 months,” he said.

Gorillas rivals Getir and Zapp have also announced staff lay offs as the quick commerce sector is looking into uncertain times after a period of readjustment after the growth it saw during the pandemic.

Gorillas raised $1 billion at a $2.1 billion valuation in October from investors, but CEO Kagan Sumer has acknowledged the company has since struggled to raise more.

Sources told Reuters that Gorillas is a takeover target for meals companies eager to see the delivery industry consolidate.

“The problem for private equity investors is that the underlying business is not there to make it cash neutral,” they added.

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