Bad times for the delivery sector. Gorillas has announced that it is withdrawing from Spain, as well as from other European markets. Glovo’s great European rival that arrived in our country in June 2021 has decided to change course, laying off hundreds of employees and clearly cutting costs.
Gorillas leave Spain without having reached a year of life. The landing of Gorillas in Spain was in style, with more than 2,000 distributors and available in the main cities. But without having even reached 11 months, the company of ultra-fast deliveries in 10 minutes has seen that its current model does not convince them.
Gorillas will continue to seek additional financing, although it is not clear that it can maintain its status as a unicorn, with a valuation of more than 1,000 million euros. In addition to Spain, Gorillas has announced that it is leaving Italy, Denmark and Belgium.
He fires half of his employees. The withdrawal from Spain is part of a company plan to reduce costs. According to Manager Magazin, a total of 320 employees will be laid off at their Berlin offices. The idea will be to focus on five markets where they are most competitive: Germany, France, the Netherlands, the United Kingdom and the United States. Five markets where they get 90% of their income.
Hard European and Spanish competition. The ultra-fast delivery industry has a lot of competition. On the one hand in Spain, the national Glovo has a strong presence. On the other hand, Gorillas has seen Getir, the Istanbul-based Turkish delivery giant, do better. At least if we look at the number of downloads of their applications.
Complying with the Rider Law, but with criticism of a ‘toxic culture’. One of the explanations that Gorillas gave for their arrival in Spain is that they did so in compliance with the Rider Law. That is, with contracted delivery men and without using freelancers. Although, as explained by the specialized media Sifted, multiple Gorillas employees denounced the company’s lack of security and toxic culture, also comparing it to the WeWork bubble.
The open tap of money is over. One of the strategies to attract users of ultra-fast deliveries is the subsidy of orders, with discount coupons. A series of very aggressive discounts that were partly covered by the large rounds of financing obtained. However, in recent weeks we have been seeing a clear change in trend within the technology sector, where investments are being much more conservative.
Venture capital has said enough to aggressive growth at the cost of burning money with little return and unprofitable models are beginning to be ruled out. The ultrafast deliveries of companies like Gorillas is a sector that casts many doubts on its viability.
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George is Digismak’s reported cum editor with 13 years of experience in Journalism