Tencent is said to be backing grocery startup Gorillas at a valuation above $1 billion

  • Year-old grocery startup Gorillas is said to be raising big funding at a mooted unicorn valuation.
  • Gorillas promises groceries in 10 minutes to city-dwellers who order via its app.
  • The round is expected to close in the coming days and ranges between $120 million to $250 million.
  • See more stories on Insider’s business page.

Gorillas, an app which promises grocery deliveries in 10 minutes, is closing a second major round of funding in less than six months, four industry sources told Insider.

The startup was founded in Berlin by entrepreneurs Kağan Sümer and Jörg Kattner in May 2020, and is set to raise a large sum after experiencing rapid growth through the beginning of 2021.

The figure is understood to be in the range of $120 million and $250 million.

The firm previously announced a $44 million funding round in December, led by hedge fund Coatue.

The final investor line-up may change, but documents seen by Insider indicated that Chinese tech giant Tencent is set to co-lead the round.  Tencent, best known as the firm behind chat app WeChat, has backed a number of European startups to date, including AI firm Prowler.io and UK self-driving software firm Oxbotica.

Sources also named DST Global — which backed Revolut and Twitter — as an investor in the round, alongside existing backer Coatue. Deliveroo backer Greenoaks Capital is also said to have looked at the deal.

The documents shown to Insider indicated that Gorillas was targeting a post-money valuation of at least $1.1 billion, having raised at an approximately $175 million valuation at its earlier Series A round last year. An industry source additionally said the deal would value the business at $1 billion or higher, a staggering figure for a startup that is less than a year old.

The round is close to being finalized, and details may still change.

DST Global, Greenoaks Capital, and Tencent did not respond to a request for comment. Coatue declined to comment. Gorillas declined to comment.

The new funding round, and Gorillas’ mooted valuation, highlights the continued rush by venture capitalists into the grocery delivery space, which has been supercharged by the pandemic. They hope that the promise of superfast delivery will appeal to a generation of consumers accustomed to on-demand services such as Uber and Deliveroo.

Whether this bullishness is justified remains to be seen, given the margins for online grocery are low.

Like many of its rivals, Gorillas offers groceries via an app to be delivered by its riders. Its riders are full-time employees, and the startup fulfills orders from its network of warehouses, or “dark stores.” The firm serves several cities in Germany and the Netherlands and launched in London earlier this year. Job postings on Gorillas’ site indicate the firm plans to expand to more UK cities, including Bristol and Manchester.

Other new startups in the increasingly crowded space include UK delivery service Dija, which raised $20 million in seed funding last year and just made its first acquisition in the form of Cambridge-based rival Genie. Turkish delivery service Getir expanded to London in January, and is backed by Silicon Valley investor Michael Moritz. At the start of March, Czech competitor Rohlik raised $230 million. And Flink, a competitor on Gorillas’ home turf of Berlin, raised $52 million at the start of March.

The European grocery retail market is overall expected to be worth approximately €2.3 trillion ($2.7 trillion) in 2022, according to IGD.

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