Gorillas Raises $290M, Surpasses $1 Billion Valuation

Gorillas Secures $290 Million in Series B Funding, Exceeding $1 Billion Valuation

The Berlin-based startup, Gorillas, which specializes in rapid grocery and everyday item delivery – promising service in as little as 10 minutes – has successfully completed a $290 million Series B funding round. This achievement propels the company’s valuation beyond the $1 billion mark.

Investment Details and Structure

Coatue Management, DST Global, and Tencent spearheaded the investment, with additional participation from Green Oaks, Fifth Wall, and Dragoneer. Atlantic Food Labs, an existing investor, also contributed to this round.

According to Gorillas CEO and co-founder Kağan Sümer, the funding consists entirely of equity, without any debt components. The company has not disclosed whether the round included any secondary funding, involving existing shareholders selling portions of their holdings.

Rapid Growth and Employee Bonuses

Gorillas has attained “unicorn” status – a valuation of $1 billion or more – at an exceptionally fast pace within the European startup landscape. To acknowledge this milestone, the company intends to distribute $1 million in bonuses to its rider and warehouse personnel.

The specifics of how this bonus will be allocated among employees remain undisclosed. It is also unclear whether the payment will be delivered as cash, stock, or a combination of both. This announcement coincides with reports of Gorillas riders in Germany initiating efforts to form a union.

“We directly employ over a thousand riders, differentiating us from typical gig economy models,” explains Sümer. “This allows us to prioritize robust career development, rider safety, and a positive work environment. Furthermore, every rider will receive a one-time payment.”

Expansion and Operational Model

Established in May of last year by Kağan Sümer and Jörg Kattner in Berlin, Gorillas has quickly expanded its services to over 12 cities, including Amsterdam, London, and Munich.

The company facilitates on-demand ordering of groceries and household essentials, boasting an average delivery time of 10 minutes. This is achieved through a network of 40 micro-fulfillment centers, known as “dark stores,” strategically located across Germany, the U.K., and the Netherlands.

Customers pay a delivery fee of just over $2 and have access to “more than 2,000 essential items” priced competitively with traditional retail stores.

Changing Consumer Habits and Pandemic Impact

“We believe the traditional weekly grocery shopping trip is becoming obsolete,” states Sümer. “People’s lifestyles are increasingly spontaneous, and their shopping habits are evolving accordingly.”

He notes that while supermarket accessibility has increased, living spaces in urban areas are shrinking, reducing storage capacity. “The pandemic has also accelerated the demand for grocery delivery services. If consumers can conveniently order clothing and other items for home delivery, the same should apply to essential groceries. Gorillas provides customers with the items they need, precisely when they need them.”

User Base and Basket Composition

Sümer indicates that the service initially attracted early adopters seeking a novel experience, with the app initially available only in English. He asserts that Gorillas has since cultivated a “very broad” and “extremely loyal” user base.

“With geographical expansion and positive word-of-mouth referrals, we now serve a diverse range of customers, mirroring the demographics found in a typical supermarket,” he adds.

Regarding typical order contents, Sümer explains that customers tend to increase their basket size over time as their trust in the service grows. “Moreover, customers are incorporating a larger proportion of their usual supermarket purchases into their Gorillas orders, including fresh produce and products from local suppliers.”

Competitive Landscape

Competition within the dark store sector, particularly in cities like London – a key market for Gorillas – is intensifying. Operators are employing tactics such as issuing vouchers and offering substantial discounts to rapidly acquire customers. Venture capitalists are also investing significant capital into this space, despite the fact that unit economics have yet to be conclusively demonstrated.

Flink, another Berlin-based company, recently announced a $52 million seed funding round comprised of both equity and debt. The specific equity-debt split was not disclosed, but sources indicate an approximate 50/50 allocation.

Key Players in the Rapid Delivery Market

Other companies operating in this sector include London’s Jiffy, Dija, and Weezy, as well as France’s Cajoo. Zapp, also based in London, is currently operating in stealth mode. Getir, which originated in Turkey, has also expanded into London and received substantial backing.

Furthermore, U.S.-based goPuff – which recently secured an additional $1.15 billion in funding, resulting in an $8.9 billion valuation (compared to $3.9 billion in October) – is exploring expansion into Europe and has engaged in discussions regarding potential acquisitions or investments in U.K.-based Fancy.