Gorillas Turns Focus to Profitability After Market Stutters

(Bloomberg) -- Grocery delivery company Gorillas expects to be profitable on a group level within 12 months, its chief executive officer said, despite the broader market downturn.

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“The market changed, especially in the last three months, CEO Kagan Sumer said at the Consumer Goods Forum’s Global Summit in Dublin on Wednesday. “We realized we have to adapt, course correct and we had to do it fast.”

READ: Gorillas Startup Dream of Food Delivery and Office Raves Falters

The German startup, which promises to deliver groceries to customers within 20 minutes, had been focused on growth, but has been hindered by a lack of access to venture capital funding.

“Now the whole focus is going toward profitability,” Sumer said. Gorillas expects to be operationally profitable in three months, he added.

One of the key components of Gorillas’ profitability is partnerships -- such as its pilot with UK supermarket chain Tesco Plc -- as a way to increase margins and buying power, as well as tap into real estate used by larger corporations. In return, the startup brings its technology and delivery expertise.

“When you do that the business becomes more financially sustainable,” Sumer said.

Gorillas is also using corporate partnerships to explore a private label strategy, in an effort to boost profits and create cheaper products to meet the needs of inflation-hit consumers, he added.

“We are not that experienced in product creation, so that’s why it’s also important to have a partner so that we can do what we do best, which is technology and distribution,” he said.

Gorillas Explores Options, Weighed Deals With Delivery Rivals

While world events and inflation have roiled markets in recent months, in hindsight Sumer said he could have perhaps changed strategy earlier. “Maybe six months ago I could have said we should stop focusing on growth, maybe six months earlier, but it’s impossible to know.”

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