Thursday, May 23, 2024

Grocery delivery app which thrived during lockdown and has links to Russian oligarchs reveals plans to leave the UK – with 1,500 jobs to be axed

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The grocery delivery app Getir which thrived during lockdown has announced it will leave the UK, with an estimated 1,500 jobs to be lost.

The Turkish company, once valued at £9.5 billion, has links to two Russian oligarchs, Vladimir Potanin and Arkady Volozh. Potanin is a known crony of Vladimir Putin.

The firm will also leave Europe and the US to focus solely on its home market in Turkey, bringing an end to its rapid expansion across the regions since the pandemic.

The announcement comes after speculation that Getir’s UK and European operations were struggling financially, following its decision to pull out of Italy and Spain last year.

It said it now only makes about 7 per cent of its revenue outside of Turkey. 

The grocery delivery app Getir which thrived during lockdown has announced it will leave the UK (stock image)

Arkady Volozh (left) is the founder of Yandex, the operator of Russia's major Internet search engine and investor in Getir, speaking to Vladimir Putin in 2017

Arkady Volozh (left) is the founder of Yandex, the operator of Russia’s major Internet search engine and investor in Getir, speaking to Vladimir Putin in 2017 

Russian billionaire and businessman Vladimir Potanin

Arkady Volozh, Co-Founder of Yandex Group

Russian oligarchs Vladimir Potanin (left) and Arkady Volozh (right) are shareholders of Turkish-based delivery app, Getir, which launched in the UK and US in 2021 

Getir, which means ‘to bring’ in Turkish, will also exit Germany and the Netherlands -its only remaining EU markets. 

However the firm’s separate US subsidiary, FreshDirect, will continue operations.

The rapid delivery company grew rapidly over the course of the pandemic with a controversial, ‘ultra-fast’ delivery service where bike couriers are so speedy that critics said they endangered themselves and the public.

In 2022 the company offered about 1,500 grocery items from their dark stores in the US – ranging from bananas to filet mignon to cough drops – and promises to deliver orders to customers’ doorsteps in just 10 to 15 minutes. 

In 2021 Getir introduced its 24/7 business model in Chicago, New York, and Boston, and now plans to blanket most major US cities with its purple-clad delivery workers trying to beat the traffic on yellow bikes and scooters. 

The company markets itself as an 'ultra-fast' service that aims to deliver items to customer's doorsteps in just 10 to 15 minutes

The company markets itself as an ‘ultra-fast’ service that aims to deliver items to customer’s doorsteps in just 10 to 15 minutes

Getir introduced its 24/7 business model in Chicago, New York City, and Boston, where purple-clad delivery workers have been seen trying to beat the traffic on yellow bikes and scooters in 2021

Getir introduced its 24/7 business model in Chicago, New York City, and Boston, where purple-clad delivery workers have been seen trying to beat the traffic on yellow bikes and scooters in 2021 

However following the invasion of Ukraine by Russia in February 2022, MailOnline revealed that Potanin and Volozh, both among the richest men in the world, are investors in the company

At the time Potanin, 63, helped Getir raise over $550million for accelerated expansion in the US, bringing the company’s valuation to more than $7.5billion. 

And according to reports from Russian newspapers, Potanin’s company, Interros, is the largest investor in Winter Capital Partners, a key partner of Getir. 

With a fortune estimated at around $31billion, Potanin is officially the richest man in Russia and one of the wealthiest in the world.

Bloomberg Billionaires Index ranked him the 48th richest in the world – a position he achieved thanks to his stronghold on supplies of nickel and other metals. 

In June 2022, the UK Government imposed sanctions on Potanin for being one of the major oligarchs in Putin’s ‘inner circle’.

Volozh, 60, is the co-founder of Yandex, the operator of Russia’s major Internet search engine – sometimes referred to as Russia’s Google – and was listed as a co-founder of Getir.

With a fortune estimated at around $31billion, Potanin (right) is officially the richest man in Russia and one of the wealthiest in the world. Pictured: Together with Putin in 2017

With a fortune estimated at around $31billion, Potanin (right) is officially the richest man in Russia and one of the wealthiest in the world. Pictured: Together with Putin in 2017

Getir was one of a clutch of fast grocery delivery companies that expanded quickly during the Covid-19 pandemic, with lockdowns driving heightened consumer demand

Getir was one of a clutch of fast grocery delivery companies that expanded quickly during the Covid-19 pandemic, with lockdowns driving heightened consumer demand

Getir was one of a clutch of fast grocery delivery companies that expanded quickly during the Covid-19 pandemic, with lockdowns driving heightened consumer demand.

Co-founded in 2015 by the Turkish tech entrepreneur Nazim Salur, the Istanbul-based Getir allows customers to order groceries from a smartphone app with the promise of ultra-fast delivery.

Getir was founded by Turkish tech entrepreneur Nazim Salur (pictured) in 2015

Getir was founded by Turkish tech entrepreneur Nazim Salur (pictured) in 2015

Success came just as fast as its deliveries in Salur’s home country. And soon, the COVID-19 pandemic turbo-charged its expansion as consumers throughout the world were confined to their homes.

Getir spread to the UK in January 2021, and made its debut in the US months later in November.

Unlike mainstream food delivery apps such as UberEats and DoorDash, Getir does not pickup from restaurants and it prides itself in being a lot faster.

Getir and competitors, however, are the target of critics who say that, in addition to taking investments from oligarchs, the need for speed is endangering employees and members of the public.

Delivery employees have been known for their recklessness as they race through narrow streets and weave in and out of traffic with, at times, heavy loads.

Getir is a grocery delivery app that was first popularized in Turkey before expanding to Europe and the United States

Getir is a grocery delivery app that was first popularized in Turkey before expanding to Europe and the United States

An estimated 1,500 jobs will be lost in the UK following the decision of Getir to leave

An estimated 1,500 jobs will be lost in the UK following the decision of Getir to leave

During COVID, according to a Turkish courier association, over 190 delivery people on two wheels have been killed in traffic crashes in that country alone – where Getir has the larger share of the market.

A Getir spokesman said in 2022 the company applied some of the strictest safety standards in the business. 

It hit a valuation of 12 billion US dollars (£9.5 billion) in 2022 as it grew its operations across Europe and the US.

Getir even bought rival delivery firm Gorillas in December 2022 in a £96 million deal.

However, as people returned to physical shopping, profit margins fell. In 2023 it cut 14 per cent of its workforce, which then stood at 23,000 staff across Europe.

Competitors such as Deliveroo and Just Eat have also announced more than 2,000 job cuts between them in the last 18 months.

Sky News reported earlier this month that Getir was expecting to cut its UK operation and that it would affect 1,500 workers including warehouse staff, managers and riders.

A spokesperson did not confirm how many jobs would be cut on Monday.

Getir will continue to restructure its business around Turkey.

In a statement the company said: ‘In parallel, Getir has raised a new investment round, led by Mubadala and G Squared. Getir will utilise these funds to bolster its competitive position in its core food and grocery delivery businesses in Turkey.

‘Getir expresses its sincere appreciation for the dedication and hard work of all its employees in the UK, Germany, the Netherlands and the US.’

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