Founders of online delivery companies that exploded during the pandemic are seeing their fortunes vanish from San Francisco to Istanbul. According to the Bloomberg Billionaires Index, the boom produced six known billionaires, four of whom have already lost their billionaire status. The group, which includes the founders of Getir in Turkey, Just Eat Takeaway.com NV in Amsterdam, and Instacart and DoorDash Inc. in Silicon Valley, has lost more than $15 billion in all.
During the epidemic, when consumers were stuck at home, investors poured money into food and grocery delivery companies. Once-generous values for cash-guzzling industries have been cut as companies see the problems ahead.
“The fact that high annual exceptional growth rates have been an exceptional phenomenon and cannot be maintained at the same level over years should have been clear from common sense alone,” Matthias Schu, a lecturer at the Lucerne School of Business, said in an interview.
Challenges for food delivery giants amid post-pandemic landscape
Instacart cited the pandemic as one of its risk factors ahead of its initial public offering in September. Just Eat Takeaway’s Jitse Groen stated in July that the company is still sensitive to Covid trends as a predictor of demand, with orders increasing one quarter “due to the resurgence in Covid cases.” DoorDash’s Tony Xu stated in August that there are “a lot of problems there to solve” in the post-pandemic e-commerce landscape.
Getir’s Nazim Salur, who amassed a $5 billion fortune during the pandemic, is the latest billionaire to lose his status, according to a Bloomberg analysis based on a Financial Times story claiming that Getir’s latest investment round reduces the company’s valuation by over 80%.
Even as pandemic shutdowns and demand decreased in recent years, Getir sought to expand. Following a $529 million loss in 2021, the business invested $1.2 billion in 2022 to acquire German competitor Gorillas Technologies, which caters to consumers with a 10-minute delivery time.
Getir also expanded into the United States and Western Europe, only to withdraw from numerous European countries earlier this year. In a July staff meeting, Salur stated that the Turkish market is the company’s only profitable business. In August, the company announced that it would lay off more than 10% of its global staff, or over 2,500 people. Getir’s representative declined to comment.
Stocks fall
Instacart, which venture investors valued at up to $39 billion in March 2021, went public on Sept. 19 at around a quarter of that price. The stock gained 12% on the first day of trading, giving co-founder Apoorva Mehta a $1.1 billion ownership, down from a $3.5 billion fortune at its peak.
Meanwhile, Andy Fang of DoorDash has lost his billionaire status, while the other co-founders, Xu and Stanley Tang, are barely hanging on. Since peaking in November 2021, the food-delivery company’s stock has dropped more than 60%.
Another founder, Groen of Just Eat Takeaway, was worth about $2 billion in October 2020, but 85% of his money has vanished as the company’s share price has fallen. DoorDash and Just Eat Takeaway representatives declined to comment on the methodology, while Instacart did not reply to calls for comment.
Despite less stringent restrictions and lower operational expenses, the same trend is seen in growing economies such as India and China. Swiggy’s worth was halved in May, while local competitor Dunzo is struggling to pay its employees and raise new capital. In China, Missfresh Ltd.’s market capitalization fell below Nasdaq’s $5 million minimum criteria in July, and the company is fighting to avoid delisting.