Rapid grocery delivery startup Gorillas is pulling out of several regions in Europe to focus on its key markets, including the UK, as the company shifts its focus from “hyper-growth to a clear path to profitability”.
The Berlin-based grocery delivery company said it will cut around 300 roles within its global workforce in an effort to extend its runaway amid a difficult economic period for the tech industry.
The majority of the roles being eliminated are based in the company’s German headquarters in Berlin.
In addition to the staff cuts, Gorillas has announced plans to cease operations in Italy, Spain, Denmark, and Belgium, to better focus on what it describes as its key markets of the UK, Netherlands, the US, France, and Germany.
The company has said that 90% of its revenue comes from those five markets, so it will be focusing on trying to achieve profitability in those before continuing services elsewhere.
Founded in 2020, Gorillas is one of a handful of rapid delivery startups that sprung up during the pandemic to courier grocery orders to consumers in 20 minutes or less.
Gorillas’ rapid growth
Gorillas’ growth has been as rapid as its delivery service, securing $1.3bn in funding, including an eye-watering $1bn Series C round in September last year. Its last publicly shared valuation stood at $3.1bn, just over a year after its first seed round.
However, while huge amounts of cash have been thrown at startups in the rapid delivery market – particularly during the industry’s pandemic boom – profitability remains a challenge across the board, as concerns that Gorillas may not be able to meet its massive expectations continue.
Despite raising astronomical financial figures in such a short time, sources close to the company have claimed it is facing significant debts to suppliers and has been operating on a monthly burn rate of up to $75m, as reported by TechCrunch.
Gorillas is just one of many tech companies feeling the heat of harsh economic times. Buy now pay later firm Klarna announced it will be cutting 10% of its staff, while London-based online events platform Hopin lost around 12% of its staff back in February.
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