Getir Acquires Online Grocery Delivery Service, FreshDirect

Getir Acquires Online Grocery Delivery Service, FreshDirect

Getir, the Turkish instant grocery delivery company, has announced the acquisition of FreshDirect, a well-established online grocery delivery service based in New York. This strategic move marks a significant step in Getir's efforts to expand its footprint in the U.S. and strengthen its position as a consolidator in the grocery delivery sector.

Transaction Snapshot

  • Deal Value: Not disclosed.
  • Deal Type: Acquisition.
  • Deal Date: 8 November 2023
  • Prior investors: JPMorgan, the U.K. grocery chain Morrisons, AIG, and Maverick Capital.

FreshDirect, known for being one of the pioneers in online-only grocery delivery, has a history of substantial financial backing, having raised up to $517 million during its startup phase. The company was previously acquired by Ahold Delhaize and Centerbridge in November 2020 for $300 million. Despite the acquisition, FreshDirect will retain its brand identity.

The acquisition arrives at a challenging time for both Getir and the broader grocery delivery industry. Getir, which was valued at $11.8 billion in March 2022, has recently faced a valuation decrease, seeking funding at a reduced valuation of $2.5 billion. The company has undergone various changes, including layoffs and acquiring competitors like Gorillas. Other major players in the European instant delivery market, such as Flink and Gopuff, have also experienced similar market trends.

In the U.S., companies like Instacart have struggled, with its market capitalization falling significantly from its peak private valuation. FreshDirect had previously attempted to expand beyond New York, including into Philadelphia and Washington, but retracted to focus on the New York region in 2022.

The grocery delivery sector experienced a surge during the COVID-19 pandemic due to increased demand for online shopping and social distancing measures. However, the post-pandemic period has seen a correction in demand and challenges in the economic sustainability of these companies.

The acquisition of FreshDirect by Getir is expected to bring synergies, leveraging Getir's technology and operational capabilities to enhance FreshDirect's service offerings. This collaboration aims to provide quicker and more efficient services to FreshDirect's customer base while expanding Getir's product range, particularly in fresh produce, for its New York customers. The deal was announced with minimal fanfare, indicating a strategic but low-key approach by both companies in this consolidation phase.

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