- 10-minute delivery startup Getir, founded in Turkey in 2015, is available in nine countries.
- The lightning-fast player, valued at $7.7 billion, faces rivals like Gopuff and Gorillas in the United States.
- CEO Nazim Salur told Insider Getir that he tested the model, so “we know what we’re doing.”
A year after launching fast delivery startup Getir in Turkey, co-founder and CEO Nazim Salur flew to Silicon Valley in 2016 to raise money for the company.
But venture capitalists balked at Getir’s central vision: to control grocery inventory and hire their own couriers to deliver goods within 10 minutes. Back then, food delivery pioneers like
and DoorDash raised millions in venture capital with the opposite model of using independent contractors to deliver prepared food to restaurants.
“He will never survive,” he was told.
Salur therefore returned to Turkey empty-handed, determined to prove investors wrong.
Getir takes a different approach from its competitors on product selection
After learning the intricacies of running a delivery business in 10 minutes, Salur expanded Getir to nine countries.
The direct-to-consumer delivery model avoided by early investors has now been replicated by dozens of startups around the world. At the start of 2020, the Turkish firm was finally recognized for its pioneering ultra-fast model outside its home market. It received $38 million in funding from investors, led by venture capitalist Michael Moritz, a partner at Sequoia Capital.
Sequoia is now a top backer of Getir, which has raised $1.2 billion to date. The company is valued at over $7.7 billion.
Getir has also joined the fray of super-fast players launching or expanding in the US, including Gopuff, Gorillas, Buyk, Jokr and Fridge No More. Getir is in Boston, New York and Chicago in December.
But ultra-fast startups in the United States are already facing headwinds, particularly in New York. A former operation in Manhattan, 1520, closed in December as Getir entered the city. The news reported that Jokr, which raised $170 million, was discussing a sale to rivals, while Gopuff is restructuring its U.S. business and cutting jobs ahead of a potential initial public offering.
Salur said he’s not worried about entering the crowded US market later than others.
Over the years, Getir has learned what works and what doesn’t for successful 10-minute delivery in densely populated cities and suburbs, he said.
“They’re trying to make it in New York, and they’re trying to learn the trade at the same time. While we know what we’re doing,” Salur told Insider. “We know how to manage it, how to deliver our products, how to build the campaigns, what works, what doesn’t, how to open stores, how to manage a team, how to use AI, how to plan everything.”
For example, while some super-fast players offer up to 3,000-4,000 items, Getir sticks to selling around 2,000 of the best-selling items.
If you have too many items, it leads to waste and ultimately hurts margins, Salur said. The same goes for the staffing of its W-2 employees. He said the company leverages data and technology to ensure it has adequate staffing during peak and off-peak business periods.
While Buyk and Gopuff are investing in private label offerings in the US, Salur said Getir will not introduce private labels in emerging markets. Getir, he said, offers private label products in Turkey, but only because it is an established market.
“If you don’t have a ladder, it’s not worth it,” he said.
New York’s fast delivery market ‘operates at very unsustainable levels’
In New York, competition is so fierce that superfast delivery players are offering promotional coupons ranging from $20 to $25 on each order for new customers.
This raises eyebrows among investors. On Monday, Robert Mollins, a Gordon Haskett analyst, ordered $104.28 worth of food from Getir, Jokr, Gorillas and Buyk. The total rebates he received amounted to $87.22, he said in a Tuesday note.
“While we don’t know when this will slow down, our almost free lunches indicate that the environment is operating at very unsustainable levels and will require a very sticky user base for the economy to function in the long term,” Mollins wrote. “We now know why many of these businesses are trying to sell themselves or, in the case of 1520, closing their doors.”
Salur likened discounting practices to a plane burning a lot of fuel, or venture capital money, on takeoff.
And players don’t make money until they reach cruising altitude, where “you’re burning the right amount of fuel,” he said. “And, we know how to climb to cruising altitude,” he added.
In the United States, outside of some Gopuff markets, most players lose money when entering new cities.
Some established cities in Turkey, where Getir was launched in 2015, are profitable, Salur said. In the year-old UK market, Getir is heading towards profitability, he added.
“In the United States, we won’t be profitable for a while,” Salur said. “It’s normal. A 2 month old baby doesn’t walk, sing or run.”