4 min read

How Gorillas Is Disrupting the Grocery Delivery Industry

Carmine Meoli

Jun 01, 2021

The demand for online shopping exploded during the COVID-19 pandemic, with consumers opting to shop safely from home during lockdowns and beyond. McKinsey* predicts that the share of online grocery sales will continue to grow at a faster rate than it did before the pandemic. Today, a previously lucrative but niche sector of the grocery industry has become a megatrend.

Capitalizing on this growth is a group of agile young start-ups who aim to improve the online grocery shopping experience with on-demand order fulfillment in under 10 minutes.

Let’s take a look at one such player – the Berlin-based start-up Gorillas.

A newly crowned “unicorn”

Just nine months after its impressive launch, Gorillas raised EUR 245 million in Series B, bringing its valuation to USD 1 billion – a first for a German start-up. And investors are impressed with Gorillas having received repeat investment from Coatue Management and funding from Atlantic Food Labs, Dragoneer, DST Global, Fifth Wall, and Tencent. Gorillas is thought to be raising additional funding at a valuation of more than USD 6 billion, just a few weeks after its last round.

An ambitious vision

Gorillas’ stated aim is to completely transform the way shoppers buy their groceries by edging out traditional supermarket incumbents and usurping convenience stores. Berlin-based Gorillas CEO and founder Kağan Sümer intends “to change the game in the grocery retail market”. The company plans to do this by using its network of warehouses (so-called “dark stores”) and a community of more than 1,000 employed delivery drivers. This business model enables grocery delivery at retail prices in under 10 minutes.

Meeting the changing demand

McKinsey* suggests that grocery retailers will need to supply “fresh, local, and healthy options in line with consumer trends.” As the focus on cooking from scratch continues, Gorillas seems well-placed to exploit this trend. Forming partnerships with local farmers provides Gorillas with access to fresh, seasonal products and facilities short supply chains and supports local communities.

A sense of purpose

With consumers placing increasing value on brands with a sense of purpose, Gorillas is prioritizing social responsibility. Gorillas employs all of its 1,000+ community of delivery drivers rather than relying on contractors and, after raising its Series B funding, the company distributed USD 1 million across its warehouse and rider workforce in bonuses.

“Gorillas exists to create a world with immediate access to your needs. We are not business people building a delivery company – we are delivery people building a business” Kağan Sümer

It also has environmental credentials, minimizing packaging where possible and using bikes rather than cars to deliver – reducing traffic and emissions (as well as expediting delivery time). And as shoppers adopt more “on-demand” grocery purchasing behaviors, the need for food storage is reduced, and with it, the problem of food waste. In addition, Gorillas recently made a USD 50K donation to the World Wildlife Fund to support a central Africa project working to protect lowland gorillas.

Faster than you

Gorillas is currently operational in 18 cities and intends to invest more in its technology and expand into 50 new cities in 10 countries, including New York and Paris. In Europe, the competition includes Flink in Germany and Dija Getir, Jiffy, and Weezy in the very aggressive London marketplace. In the US, the SoftBank-backed Gopuff grocery delivery brand has just made a deal to acquire the UK-based Fancy. Instacart, meanwhile, has partnered with 7-Eleven to compete with the dominant DoorDash.

The Gorillas brand strapline is “Faster than you”, and it certainly seems to be making the most of its first-mover advantage in an increasingly competitive landscape. With strong management and ambitious expansion plans, Gorillas’ tactics look set for success.

What makes Gorillas an appealing investment

  • First-mover in an underpenetrated (3% on average in Europe) and rapidly growing (10% p.a.) market
  • Strong management team, experienced in delivery business (with backgrounds in Deliveroo, TIER Mobility, HelloFreshGO, etc.)
  • Top-notch investor backing, including seasoned funds setting the tone in the delivery business (Tencent, Atlantic Food, DST Global, etc.)
  • hyper-growth unicorn reaching $1b+ valuation nine months after launch
  • Sustainable and healthy margins secured through strong procurement relationships with suppliers 
  • Strong expansion prospects across geographies, merchandise categories, and additional monetization initiatives

Stableton can help you exploit this opportunity

At Stableton, our mission is to break down entry barriers to private markets and give you access to exclusive pre-IPO opportunities with investment amounts as low as CHF 10,000. We work with individual investors, institutions, and investment professionals to deliver these outstanding opportunities.

Sign up here to learn more about the Gorillas opportunity.

* www.mckinsey.com/industries/retail/our-insights/how-european-shoppers-will-buy-groceries-in-the-next-normal

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