10-minute grocery startup Gorillas is in talks to raise a new funding round led by US’s largest food delivery company DoorDash at a valuation far below what it had hoped earlier this year.
Two sources told Sifted that the Berlin-based startup was expecting to raise at a $2.5bn valuation, which is far below the $6bn that it had previously been aiming for. One source said they felt the deal was going to be on the “worst possible terms”.
Two sources said that Doordash may even buy the whole company for a “low billion USD amount” in what they both described as a “fire sale”. The potential DoorDash investment was first reported by the Financial Times.
Gorillas became the fastest European tech company ever to hit the $1bn valuation milestone earlier this year — just nine months after launch — amid a flurry of VC interest in on-demand grocery startups. While fast-growing startups, especially one growing as fast as Gorillas, often hit growing pains, Gorillas employees have alleged arbitrary firings, exploitation of riders and warehouse workers, as well as a hostile environment at the HQ. Gorillas says that the company has a culture of inclusion, employee care and dialogue.
DoorDash does not have a presence in Europe, and average have reported that the food delivery giant is looking for an acquisition in Europe. One person with knowledge of the negotiations between DoorDash and Gorillas said that the US company was looking to take advantage of Gorillas’s market share in Europe. DoorDash’s US competitor, Gopuff is also said to be in talks to acquire London-based 10-minute grocery Dija.
Other, older food delivery companies in Europe are moving into the on-demand space. Estonian startup Bolt raised €600m this week from Sequoia, Tekne and Ghisallo to move into the on-demand grocery business. VCs are betting that only a few, dominant players will emerge from the fray.
Miriam Partington is Sifted’s Germany correspondent. She tweets from @mparts_