Existing investors provide the fast delivery service with fresh money. At the same time, the company is laying off more employees.
(Photo: Bloomberg)
Berlin. Frankfurt, Dusseldorf After tough and lengthy negotiations, the Berlin fast delivery service Flink collected 150 million euros from its existing investors. The corresponding contracts have been signed, a spokesman told the Handelsblatt on Wednesday. Discussions are currently being held with potential new investors who could increase this capital injection.
As part of the new round of financing, the company was valued at around one billion euros. This corresponds to a significant devaluation. The last time Flink collected money was in December 2021 and at the time, at the height of the Corona boom, it was valued at three billion dollars.
In the meantime, however, Flink has been affected by the increased food prices in addition to the fierce competition from the merged competitors Getir and Gorillas. In addition, there are high logistics and personnel costs, which Flink has been working on reducing for months.
According to earlier information from a person familiar with the negotiations, existing investor Rewe wanted to contribute a good 50 million euros and the US delivery service Doordash around 30 million. When asked, Rewe did not want to comment on the current round of financing.
The business model of Flink and its competitors is to deliver groceries by bike courier to the front door within a very short time. But so far none of the providers has shown that you can be profitable with it.
Flink is once again cutting jobs to save costs
Now it should be even more difficult that with Aldi Süd the first discounter is also testing a delivery service. From June, Aldi wants to make trial deliveries around the company headquarters with electric vehicles from a range of around 1,300 items – but initially only to its own employees.
>> Read more here: Aldi Süd is testing its own delivery service for fresh produce Groceries
In order to reduce costs, Flink is massively cutting jobs. After the start-up had already laid off 8,000 employees over the past few months, including mainly drivers, there are now another 100 jobs in administration. 500 people work there now.
The layoffs aren’t the only measure Flink has taken to make savings. The Berliners pulled the ripcord in Austria and filed for bankruptcy for the subsidiary there some time ago. At the same time, warehouses were closed. Flink is currently still active in the Netherlands, France and in the home market of Germany. The company has announced that it intends to achieve a positive operating result, at least in Germany, by the end of the year.
No more negotiations with Getir
In addition to Rewe and Doordash, the Saudi Arabian sovereign wealth fund Mubadala and the venture capitalists Target Global and Cherry Ventures are also currently involved in Flink. The lenders could not initially be reached for comment on the new round of financing.
In view of the turnaround in interest rates, the ongoing weakness in the economy and the still idle market for IPOs, it is particularly difficult for start-ups with larger cash requirements to score points with investors. In order to examine all options, Flink is said to have negotiated a takeover with its competitor Getir from Turkey. The Flink spokesman said that these talks have now been discontinued without result.
Getir is familiar with mergers: In December, the start-up from Istanbul, in which Mubadala also has a stake, took over Berlin competitor Gorillas in a rescue operation. According to financial circles, the value of the merged company was halved to seven billion dollars.
However, according to financial sources, Mubadala remains interested in a merger of Getir/Gorillas with Flink, which is why industry experts expect that the topic could come up again at a later date.
More: Price war between retailers and manufacturers: Who benefits from the gaps in the shelves in the supermarket