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Business News/ News / Management Feud at Delivery App Getir Turns Bitter After Exits
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Management Feud at Delivery App Getir Turns Bitter After Exits

A power struggle at grocery delivery company Getir is turning increasingly bitter as the Istanbul-based startup shuts down foreign operations and shareholders spar over key management positions.

Management Feud at Delivery App Getir Turns Bitter After ExitsPremium
Management Feud at Delivery App Getir Turns Bitter After Exits

(Bloomberg) -- A power struggle at grocery delivery company Getir is turning increasingly bitter as the Istanbul-based startup shuts down foreign operations and shareholders spar over key management positions.

The acrimony between the company’s Turkish founders and foreign investors, led by Abu Dhabi’s wealth fund Mubadala, reached a new high last week following the dismissal of an executive in charge of strategy, according to several people with direct knowledge of the matter, who asked not to be named speaking about problems inside the private company. 

Getir’s management, led by co-founder and Chief Executive Officer Nazim Salur, on May 6 dismissed Chief Strategy Officer Derya Erdemli, who was supportive of foreign investors’ strategy of downsizing, the people said. Mubadala is Getir’s biggest shareholder, holding about 30% compared with 25% for Salur and other Turkish investors, the people said. 

Getir, Mubadala, Salur, and Erdemli declined to comment for this story.

Operating Costs

The internal strife is a sign of the once-hyped rapid delivery market - and its flagship company - crashing back to reality. Getir’s promise to deliver groceries in 10 minutes worked well in Turkey - where labor and operating costs are low - but was tougher to execute abroad, despite the startup raising a mammoth $2 billion in venture capital to fund its expansion, according to data from PitchBook. 

As pandemic-era lockdowns eased and costs rose, Getir’s valuation fell from $11.8 billion two years ago to $2.5 billion as of September. Other investors in Getir include marquee tech-investment firms Sequoia Capital and Tiger Global, and former Sequoia Capital partner Michael Moritz.

The dispute between Mubadala and Salur first came to a head in December, when Getir’s foreign investors pushed its top management to downsize international operations and cut cash burn. Mubadala was at the time pressing Salur and other executives to quickly exit operations around the world and refocus on Turkey, the company’s home and largest market.

In February, as Getir continued to struggle to cut costs abroad, Mubadala executives visited Turkey to observe its home-country operations in person, according to the people. Mubadala executives spent weeks in the country and demanded faster action to refocus all operations on Turkey, where it has cost and logistical advantages it doesn’t in other regions. 

Board Changes

After that trip, Mubadala said additional funding would be conditional upon changes in the board and a revamp of senior management, according to the people. Mubadala, along with other investors, agreed to provide as much as $200 million, Bloomberg News previously reported, with that amount split into tranches and full disbursal contingent on Getir meeting certain targets. Of the total, $90 million has already been paid, the people said.

In late April, the parties agreed to those conditions, the people said. But Salur has not yet called a fresh meeting to determine a new board - and Erdemli’s removal looks set to further inflame tensions with his backers, the people said.

Last month Getir announced that it was halting operations in the UK, Netherlands, Germany and the US, where it also owns delivery service FreshDirect. It said FreshDirect would continue its operations.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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Published: 13 May 2024, 11:10 PM IST
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