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DoorDash, the biggest US food delivery group, is preparing to make its first investment in Europe by taking a stake in Gorillas, the fast-growing Berlin-based grocery delivery app.
Gorillas was seeking to raise hundreds of millions of dollars in new funding at a valuation of about $2.5bn, according to people familiar with its plans, far reduced from its original aspiration of a $6bn price tag. DoorDash had indicated interest in joining the round, these people said.
The deal had not yet been finalised but could close later this month, they said. The size of DoorDash’s stake could not be learned, as talks with investors continue.
The talks come after Gorillas faced protests over how it treats its delivery riders and warehouse workers, as well as the departure of senior executives, fuelling criticism of Kağan Sümer, its hard-charging chief executive.
Gorillas has already raised more than $300m from investors including Tencent, DST Global and Coatue Management, reaching a $1bn valuation with its most recent round in March. Some of those existing investors are likely to participate in the new round.
Spokespeople for both DoorDash and Gorillas declined to comment.
DoorDash has become the largest US food ordering app by customer spending, according to Edison Trends, with a market capitalisation of $58bn.
Its investment in Gorillas would be a rare case of DoorDash purchasing a minority stake in a similar business. In 2019, it acquired the US meal delivery company Caviar for $410m in cash and stock.
It would also mark another significant move from DoorDash to build its presence in Europe, particularly in Germany. In May, the Financial Times reported DoorDash had begun readying a launch of its food delivery services in the country, posting 15 job openings for a team to be based in Berlin.
Gorillas launched in New York City in May and has expanded to more than 50 cities across Europe in recent months.
Rapid delivery services offering groceries and convenience items, such as Getir and GoPuff, have raised billions in venture capital funding this year, reflecting investors’ hopes that online ordering habits developed during the pandemic will persist as economies reopen.
Several start-ups have emerged in the US and Europe over the past year promising deliveries from a network of small local warehouses, or “dark stores”, to customers’ homes in as little as 10 minutes.
The market is already beginning to consolidate. GoPuff has acquired UK-based Fancy and is reported to be in talks to buy Dija, a similar start-up founded by former Deliveroo executives. The FT reported earlier this year that DoorDash had discussed a potential investment or acquisition with several of the European grocery delivery apps.
It is not yet clear whether DoorDash would incorporate Gorillas into its own restaurant-delivery service as part of the investment. In May, Uber partnered with GoPuff to offer its selection within the Uber Eats app.
DoorDash’s interest comes as Gorillas has faced a run of negative headlines in recent months, including the protests in Berlin this summer. Some riders have complained about unfair dismissals and poor working conditions. Like most of its competitors, it also remains heavily lossmaking. Customer data was leaked online following a breach in May.
In an interview last month with The Information, Sümer — a former consultant at Bain — admitted to taking “performance enhancers” when he was working at a previous start-up but said his drug-taking was “in the past”. Two of Gorillas’ co-founders left the company earlier this year.