Gorillas is an online delivery service that allows customers to order groceries via its Android and iOS apps.
Gorillas makes money by selling its products at a profit as well as delivery fees.
Founded in May 2020, Gorillas has quickly risen to become one of Europe’s leading delivery services. The company has raised $1.3 billion in funding to date.
What Is Gorillas?
Gorillas is an on-demand food and grocery delivery service operating in eight countries, including Germany, France, the Netherlands, or the United Kingdom amongst others.
Customers on the platform can choose from a variety of product categories, including groceries, alcohol, and plenty more.
Using Gorillas is extremely simple. First, customers register for the service, either on the company’s website or by downloading any of its mobile apps (available on Android and iOS).
After entering location and payment details, customers can go ahead and browse the hundreds of items available for delivery.
Gorillas promises that orders can and will be delivered in 10 minutes. This is made possible by the fact that Gorillas operates its own set of warehouses (also called dark stores) in which products are stored and delivered from.
In contrast, delivery platforms like Instacart work together with other retailers (such as supermarkets) to deliver their products. That process normally takes significantly longer because the delivery driver has to sift through dozens of shelves in order to find all the relevant products.
The company, furthermore, supplies its riders their own set of Gorillas-branded clothing as well as electronic bikes. In fact, a large number of riders is actually employed by the company as opposed to working on a contractual basis.
Gorillas Company History
Gorillas, headquartered in Berlin, Germany, was founded in 2020 by Kağan Sümer (CEO) and Jörg Kattner.
Both founders gained substantial managerial and entrepreneurial experience before launching Gorillas. Kattner helped build up Jumia, one of Africa’s biggest e-commerce stores (heavily funded by German VC Rocket Internet).
He then went on to hold various senior management positions at HelloFresh, first as a country manager for Switzerland and then as its COO.
Sümer’s career has certainly been a little more turbulent. After graduating from university in Germany, he decided to bike from Istanbul (where he grew up) all the way to China.
After nine months on the road, he returned to Istanbul to launch his first startup. Kuru, a platform matching customers to dry cleaning shops, was unfortunately shut down after a year.
He then joined consulting powerhouse Bain and eventually returned to Germany, joining Rocket Internet to launch a business together with them.
That business became Lyght Living, an app that allowed customers to rent furniture for a limited amount of time. Yet again, the business was shut down within eight months.
Unfazed by his past failures, Sümer immediately began working on his next venture. This time he drew inspiration from his home country.
Online delivery service Getir had just announced one of Turkey’s biggest funding rounds and was picking up serious steam. In the United States, Gopuff had just announced a $750 million round led by Softbank.
Furthermore, the coronavirus pandemic made shopping in supermarkets essentially redundant. Masses of customers were pivoting to online delivery services to fulfill their (grocery) shopping needs.
Sümer and Kattner were introduced to each other by a mutual connection. They were able to scrape by a small round of seed funding. To test the concept, Sümer bought groceries from local supermarkets and stored them in his flat. Once an order came in, he hopped on his bike and delivered it (the Gorillas app was only available within his neighborhood to ensure timely deliveries).
After the successful test phase, Gorillas (which was initially named GetGoodies) was launched in May 2020 to customers in Prenzlauer Berg, a district of 165,000 people located in the heart of Berlin. The app hit like a literal atom bomb, drawing in hundreds of customers from the get-go.
Fueled by its rider’s distinct outfits as well as criminally fast delivery times, it primarily grew through word-of-mouth. Furthermore, the service was made available well into the night, which became a clear competitive advantage against local kiosks (also called Späti).
In August 2020, Gorillas raised its first-ever institutional round. Atlantic Food Labs invested €1.2 million into the company. The funding allowed Gorillas to expand its delivery and warehousing network across more locations in Berlin and Germany as a whole.
Nevertheless, the firm’s trajectory was greatly accelerated during its Series A round announced in December 2020. Hedge fund Coatue (and other unnamed investors) pumped $44 million into Gorillas.
The investment was used to speed up its expansion efforts. Gorillas launched delivery services in every major German city as well as Amsterdam, its first foreign market.
Months later, in March 2021, it raised another $290 million while being valued at over $1 billion. With that funding announcement, Gorillas became the fastest ever German startup to reach unicorn status.
Despite the firm’s meteoric rise, its success hasn’t been without roadblocks. While it does employ riders on a full-time basis, many have lamented about poor working conditions. These include injuries as a result of its (at times) unrealistic delivery time promises or from carrying extremely heavy orders.
Furthermore, neighbors living next to its fulfillment centers have frequently complained about noise as well as trash-littered streets. Drivers complain about being tracked by the management through their driver app, even when they are not working. A violation of personal privacy.
As a result, both drivers and warehouse workers have started unionization efforts – a move that has been smashed by both Sümer and the management staff.
Not everyone in the team seemed to be up for the challenge. Co-founder Kattner announced his departure in February 2021, less than a year after starting the business. He or Gorillas did not mention any reasons for his decision.
Over the summer months, troubles continued to escalate. The company allegedly fired one of its riders who was linked to the unionization efforts. However, he has since been reinstated after the Gorillas Workers’ Collective, one of the biggest backers behind its strikes, opposed his termination via legal means.
Regardless of the firm’s shortcomings, local delivery startups are here to stay. The European market is beginning to heat up with companies like Weezy, Glovo, Getir, or Flink all raising hundreds of millions. US-based Gopuff has entered the race as well with its acquisition of the UK’s Fancy.
Gorillas even tried to merge with Flink, its fiercest competitor out of Germany, in the summer of 2021. Unfortunately, talks fell through as the founding teams couldn’t agree on equity splits, leadership structures, and so forth.
To continue remaining competitive, Gorillas made sure to beef up its war chest as well. In September 2021, the company raised another round of funding, this time netting them $950 million.
Today, Gorillas employs well over 2,000 people that are scattered across multiple offices in the European Union.
How Does Gorillas Make Money?
Gorillas makes money by selling its products at a profit as well as delivery fees. Let’s take a closer look at each of the two in the section below.
The products that are sold on Gorillas are sourced and stored by the company. That means it does not deliver items from a supermarket (or other retail partners).
Therefore, Gorillas makes money whenever it sells a product. The difference between the sales price and all associated costs, such as buying and storing the product, is the profit it makes.
Venture investors and industry experts alike believe that this model is substantially more lucrative. First of all, Gorillas knows where and how much stock it has of each product. Apps that work together with other retailers oftentimes do not receive real-time information about a product’s availability, thus leading to orders not being completely fulfilled.
Next, orders can simply be fulfilled much faster. Not only does the firm have dedicated warehouse staff that is responsible for picking, but it also operates multiple warehouses in any given city. This ultimately minimizes lead times.
Third, Gorillas has the ability to set the price at which it wants to sell its items. While the company has stated that it generally doesn’t mark up prices, it can potentially do so in the future once its product is ‘sticky’ enough (and competition has consolidated).
One major downside of this model is the upfront investment that is required to build up the warehouses and buy products in bulk. Furthermore, since Gorillas drivers are often hired on a full-time basis, its driver fleet has to be on the road at all times. Platforms that hire drivers on a contractual basis can simply not pay drivers whenever there is no order.
Gorillas charges an average delivery fee of $2. Surprisingly, this is the only fee that the company applies (other platforms like DoorDash also charge so-called service fees).
The fees are used to cover the cost of delivery and not a take-home profit for the company. Since Gorillas operates its own warehouses (and drivers don’t have to sift through shelves), its delivery times are oftentimes substantially faster.
Currently, dedicated warehouse staff is responsible for collecting the order and handing it to the delivery person. In the future, Gorillas might consider using robots (similar to the ones seen in Amazon warehouses) to speed up the picking (and therefore delivery) time as well as substantially decrease cost.
Gorillas Funding, Revenue & Valuation
According to Crunchbase, Gorillas has raised a total of $1.3 billion across four rounds of venture capital funding.
Notable investors include DST Global, Tencent, Coatue, Greenoaks Capital, Atlantic Food Labs, Dragoneer Investment Group, and many more.
Gorillas is currently valued at $3 billion after it raised $950 million in September 2021. This represents a threefold increase in the span of six months. Back in march 2021, Gorillas was valued at $1 billion.
As a private company, Gorillas is not obligated to disclose revenue figures to the public. Given its rapid funding speed and scale, an IPO might be on the horizon sooner than later. Subsequent filings should thereby reveal its revenue figures.
Who Owns Gorillas?
Gorilla’s largest shareholder is the US-based hedge fund Coatue with an ownership stake of 19.4 percent. That stake was acquired during its Series A round back in December 2020.
Co-founder Sümer remains to be the second-largest shareholder with an ownership stake of 18.9 percent. Kattner, despite his departure, still owns 4.2 percent.
The second-largest institutional investor is Atlantic Food Labs, which led the firm’s seed round. It currently holds 14.9 percent.
Other institutional shareholders include DST Global (4.7 percent), Tencent (3.9 percent), Greenoaks Capital (2.3 percent), and Fifth Wall (1.1 percent).
CTO Ronny Shibley’s stake of 7.6 percent leads the employee-based ownership pool. Others include Felix Chrobog with 2.3 percent and Ugur Samut holding 2.1 percent.