Summary List Placement
The hot new consumer trend for venture capital investors is grocery apps that promise deliveries in as little as 10 minutes.
The premise is fairly simple: Take your pick of groceries, alcohol, and other essentials from an app, pay, and a courier will deliver the items to your door shortly afterwards.
It’s a trend that founders and investors will prove popular with tech-savvy users already accustomed to on-demand services like Uber, and amid the pandemic.
Data analyzed for Insider by Pitchbook showed tech investors in Europe had plowed $1.6 billion into grocery delivery startups in 2021 so far, more than double the investment into the sector for the entirety of 2020.
Turkish grocery delivery app Getir bills itself as the original gangster. Founded by serial entrepreneur Nazim Salur in 2015, the company initially struggled to attract investment from top-tier investors.
Six years on, Getir is worth $2.6 billion after a funding round led by Facebook investor Sequoia and faces competition from European clones such as Gorillas, Dija, Weezy, Fancy, and Zapp.
The amounts of cash flooding into the sector and the accompanying valuations are puzzling, given that grocery delivery is famously low margin. Consumers will not pay high prices for fresh food and other everyday essentials. Add in the costs of picking, packing, and delivering these cheap items to your day, and there isn’t much in it for the retailer.
We spoke to Getir’s founder about why investors are seeing dollar signs in a tough sector.
This Q&A has been edited for length and clarity.
Insider: Can you tell me the origin story for Getir?
Salur: Getir, the idea at the time, in 2015 was an original idea. Nobody else was doing 10-minute delivery at the time.
I was doing a taxi-hailing app, which is still around in Turkey and is called BiTaksi. I founded BiTaksi in 2013. And when we came to 2015, we were able to give taxis in an average of three minutes. I was looking at the dashboard of BiTaksi where I can see all the taxis. I just felt a sudden happiness that we hit the three-minute mark, you know, you give yourself some milestone to reach, and then just as you become happy, there’s also an emptiness. So I had that ‘now what?’ moment. A taxi is just one need, people have many other needs.
I thought at the time, ‘Why don’t I have small vans where I put a few hundred items and everyday essentials and bring the stuff to people’s doors in an average of 10 minutes?’
From the BiTaksi days, we knew how mobility worked in a city, the logistics of a crowded city, we had a lot of experience with that. If I hadn’t done BiTaksi earlier, I wouldn’t dare to do 10-minute delivery.
Insider: Running a grocery business is quite different to ride hailing. What are some costs and complexities you hadn’t anticipated?
Salur: A ride-hailing business, or just food delivery, is much easier to operate. The grocery business is at least five times more complex. Ride hailing, food …read more
Source:: Businessinsider – Tech
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