q-commerce belt-tightening continues: US category veteran Gopuff, the SoftBank-backed delivery platform juggernaut — which was recently valued at $15 billion by 2020 and was rumored to be gearing up for an IPO earlier this year (er, that didn’t happen!) — is dialing back its ambitions in Europe. doing
According to a report in Bloomberg, citing people familiar with the matter, the express grocery delivery player plans to pull out of Spain, to reduce its operations and push for profitability — a move that would also keep its regional focus. in the UK market, according to the report.
The news publisher says the UK is one of Gopuff’s fastest-growing markets, where revenue is growing at a compound monthly rate of 30%.
A spokesperson for Gopuff declined to comment on Bloomberg’s report, but we understand the gist of the story is correct.
Gopuff is only launched in November 2021 in Europe. At the time it was talking bullish about major regional expansion — saying it would go to “every country in Europe” — so while it wasn’t unique to Gopuff, it was a complete reversal of fortunes. The entire q-commerce category has been hit hard post-pandemic, as individual activity has returned to urban living – and the economic downturn in particular has dampened on-demand, encouraging shoppers to prioritize price over convenience (or indeed the impulse is like a late-night ice cream).
In July, Gopuff announced it was cutting 10% of its global workforce (around 1,500 staff) and closing dozens of warehouses, citing the need to control costs after expanding too rapidly during the pandemic.
Earlier, in the spring, it confirmed that any potential IPO filing was on ice due to the market downturn.
As well as the UK and Spain, Gopuff has operations in France – it launched in Paris in March and covers the majority of Île-de-France and parts of Marseille, Lille and Toulouse – making its debut with talk of further expansion. soon But that may no longer be on the cards if the UK market continues to be prioritized.
The UK market is hotly contested with a range of ‘instant grocery’ players such as Deliveroo (which has also recently taken back mainland Europe), Getir and Zap. Although there have also been some recent market exits (the latest being Jiffy, which rapidly pivoted to B2B this May).
Gopuff used investor cash and acquisitions to gain a fast-moving slice of European q-commerce – picking up smaller UK rivals Dija and Fancy to get the ball rolling in the region. (And, according to Bloomberg, its Spanish ops, which include about 180 staff and five dark stores in Madrid, stemmed from its Deja acquisition — so pity the staff who have to cycle through multiple employers in a few short years and face another new boss who may soon be out of a job.)
In Spain, Gopuff’s exit could be a boon for local rival Glovo, which in recent years has focused increasing efforts on q-commerce through an expanding dark store play. Although tough economic conditions have also hit the local on-demand brand – and it quietly agreed to be acquired by German rival Delivery Hero at the start of the new year, shutting down its own chances of an IPO.
In an additional twist, last month, the offices of Glovo and Delivery Hero were targeted for antitrust inspections by the European Commission — which it said was investigating primary concerns over potential violations of EU competition laws against the creation of cartels and other restrictive business practices. No formal objections have been filed — and the hearing may yet come to nothing. But what will be left of Europe’s volatile q-commerce landscape in a few years – or months – is anyone’s guess!
Also on the horizon: pan-EU regulation of platform workers, which will further increase pressure on gig economy players.
Further tightening of workers’ rights in the bloc may help explain decisions by many gig platform giants to prioritize the UK market – which is no longer an EU member, so will not be subject to the incoming reforms. Homegrown on-demand platform Deliveroo has already won a number of workers’ rights challenges in UK courts – potentially providing a template for opponents to thread the tricky operational-legal needle on that side of the English Channel.
This report has been updated with a correction: We originally said Gopuff operated a service in Germany but that’s incorrect — it doesn’t have a presence in that market.