Getir, a Turkish start-up backed by the venture capitalist Michael Moritz, has launched a rapid delivery service for grocery and corner shop items in London, in a challenge to the competitive UK food courier market.
The company, which raised $128m from investors this month to help fund the expansion, began delivering to all of London’s Zone 1 and 80 per cent of the city’s Zone 2 neighbourhoods on Wednesday.
Getir chief executive Nazim Salur said the company is initially operating five fulfilment centres in the city and plans to increase the number to more than 20 in the coming months, while expanding to Zones 3 and 4.
The Turkish group enters a feverish UK market for so-called last-mile delivery services, competing with start-ups such as Deliveroo and food retailers like Ocado. Many companies have burnt through cash to fund lossmaking operations.
“I’m sure eventually it will consolidate,” said Sir Michael, who has invested in Getir through his personal vehicle Crankstart. “But that’s part of the fun of the chase.”
Founded in 2015, Getir has drawn a following in Turkey by promising delivery in about 10 minutes, filling more than 5m orders per month in the country of 83m people. China’s Meituan has touted average delivery times of 17 minutes for retail items in a pilot programme, while the US start-up GoPuff advertises times of 30 minutes or less.
In London, Getir will operate its own network of distribution centres stocking items ranging from snacks and soft drinks to fruit and vegetables, rather than relying on the franchise model it employs in Turkey.
Getir buys directly from wholesale suppliers and charges a roughly 10 per cent mark-up on supermarket prices. It takes a £1.99 delivery fee on orders, which must meet a minimum of £10.
The company has hired a team of full-time couriers who will receive salaries just above the London living wage of £10.85 per hour, amid concerns about the working conditions of gig economy delivery drivers. Mr Salur said others hired later on a part-time basis would receive the same hourly rate.
He added that Getir planned to expand elsewhere in the UK later this year and also to two other cities in Europe, which he declined to name.
“We like big cities with chaotic traffic where people spend a lot of time on the road and have less time to shop,” Mr Salur said. “That’s a good demographic for the business.”
Investors valued Getir, which means “bring” in Turkish, at about $850m in its most recent financing, making it one of Turkey’s most valuable start-ups.
“We’ve proven in Turkey we can make it work and it’s a profitable operation,” Mr Salur said. He declined to comment on the company’s revenues or profits.
Venture capitalists and public investors have pumped money into delivery companies. Deliveroo, which has expanded into convenience and grocery delivery, recently raised funds that valued the company at more than $7bn ahead of an expected public listing this year.
The boom in grocery delivery during the pandemic has also threatened brick-and-mortar outlets, some of which have rushed to create their own online services.
“Unless those stores have a distinct following — if all they’re doing is housing commodity goods — then they will be increasingly challenged,” Sir Michael said.
Sir Michael also represents the venture firm Sequoia Capital on the board of Instacart, the $17.7bn US grocery delivery start-up that is planning a public listing this year. Unlike Getir, Instacart uses contractors to pick out and deliver groceries from local stores.
“These markets are so large for grocery and convenience goods,” Sir Michael said. “There will be different models, and there will be multiple winners.”