With the new round of financing, the company’s valuation could drop significantly.
(Photo: Getty Images; Per-Anders Pettersson)
Dusseldorf, Frankfurt According to financial circles, the negotiations of the fast delivery service Flink about a cash injection are making progress. The Berlin company, which competes with Gorillas and Getir, has already received commitments from investors for more than 120 million euros, according to a person familiar with the matter.
With the new round of financing, the company’s valuation could drop significantly, said several people familiar with the matter. Flink last raised money in December 2021 and was valued at almost three billion dollars including the 750 million raised at the time.
Rewe wants to contribute a good 50 million euros and Doordash around 30 million, said a person familiar with the matter. The two companies did not respond to a request from the Handelsblatt. Flink did not want to comment on market speculation and rumors.
Takeover negotiations with Getir not very concrete
The Financial Times also reported on Monday about takeover talks between Flink and Turkish rival Getir, which took over Gorillas in December. However, they are not very specific so far and Flink’s focus is currently on its financing round, according to several people familiar with the matter.
The Handelsblatt had already reported on Getir’s intention to buy Flink in October 2022. Investor Mubadala, the sovereign wealth fund from Abu Dhabi, has investments in both Getir and Flink. According to financial circles, there have been considerations for a rapprochement between Flink and Getir since the Gorillas deal.
Delivery services are in the red
The industry of fast delivery services, known in technical jargon as Quick Commerce, gained in importance during the corona pandemic with billions of euros in venture capital. The start-up Flink, known for its pink backpacks and advertising posters, and its rival Gorillas were among the few European start-ups that were able to achieve unicorn status just months after they were founded, i.e. were valued by investors at more than one billion dollars.
Grocery delivery services experienced a boom during the corona pandemic.
(Photo: IMAGO/Jürgen Ritter)
The business model of Flink and its competitors consists of bringing groceries to the front door by bicycle courier in the shortest possible time. So far, none of the providers has shown that you can be profitable with it. With many fast delivery services in large cities, the shopping carts are just 20 euros – too little to earn money with it.
After the delivery boom in the corona crisis, the providers are now being hit by the increased food prices. Added to this are the high logistics and personnel costs, which can hardly be changed. In addition, the competitive pressure is intensifying: Established supermarkets such as Rewe and Tegut have announced that they will significantly expand their range.
In Austria, Flink has already pulled the ripcord and filed for bankruptcy for the subsidiary there. Flink is currently still active in the Netherlands, France and the home market.
Gorillas had to agree to an emergency sale to competitor Getir in December. According to financial circles, the value of the merged company was halved to seven billion dollars.
More: How new food delivery services want to survive despite the crisis