Ultra-Fast Delivery Services Shutting Down, Closing Warehouses, Laying Off Workers

Three big names in the nascent ultra-fast grocery delivery industry, which promises an array of items available at your doorstep in around 15 minutes or less, announced mass layoffs last week, putting the skids on an industry that just last year was being hyped as the next big thing in urban tech startups. 

Berlin-based Gorillas announced it laid off 300 office employees—about half the workforce—and shut down in four European countries. Days later, rival Getir confirmed media reports it is cutting 14 percent of its staff, amounting to more than 4.000 workers. Most recently, Insider reported Gopuff is going to either “pause” or shutter 20 warehouses. 

Gorillas, Getir, and Gopuff are the survivors of a field already littered with failed ultrafast enterprises. 1520 shut down last year while Buyk and Fridge No More called it quits in March.

Ultra-fast delivery companies became a source of investor fascination during the pandemic when delivery services were in hot demand, governments pumped money into the economy, and banks kept interest rates low to prevent a prolonged recession, meaning companies seeking a billion dollars give or take in venture capital funding to launch a 15-minute grocery delivery service could get it. 

But this year, the story has turned sour. Interest rates are rising, venture capital firms are scrutinizing startups more closely, giving out less money, and demanding profits sooner, a bad combination for businesses who were hoping to ride out a saturated market, merge with other firms, or otherwise figure out how to make money sometime down the road after the founders became even more fabulously wealthy. 

Time appears to have run out. Overall, it’s a bloodbath for an industry that is just getting started and which doesn’t quite have a clear reason to exist anyway. One of the great conveniences of city living is popping to the local corner store and back in just a few minutes. It’s hardly surprising companies looking to replace that fundamental urban experience with a complex, expensive micro-warehouse and delivery network are struggling to survive.