Turkey’s rapid grocery delivery service Getir is reportedly now worth less than a quarter of the $11.8bn it was valued at 18 months ago, following a big shakeout in the sector internationally amid dwindling consumer demand.

The Istanbul-based company, one of the hottest startups that rose to renown during the pandemic, is set to raise $500m in a funding round that will value the business at only $2.5bn and is expected to close later this month, according to a September 8 Financial Times report that cited people familiar with the matter.

The $11.8bn valuation was made when Getir raised funds in March 2022; however, the valuation was said to have been slashed to around $7bn when the company pursued a funding round in April this year.

Getir’s new funding will come from existing shareholders including the Abu Dhabi wealth fund Mubadala Investment Company, the venture capital firm G Squared and the investor Michael Moritz, who recently quit Sequoia Capital after almost four decades at the California venture capital group, the FT reported.

Getir in late August said it was cutting over a tenth of its global workforce, meaning 2,500 layoffs. It is retreating from France, while it has pulled out of Spain, Italy and Portugal. The layoffs, affecting couriers, pickers and office employees, will be made in Turkey, Britain, Germany, the Netherlands and the US, the five markets where Getir intends to keep operating.

The cost of living crisis has hit demand for rapid deliveries of groceries, while costs have also gone up for operators of such consumer services. Demand for grocery delivery boomed during the height of the COVID-19 pandemic, but declined after lockdowns ended and shops, restaurants, bars and offices reopened.

Getir is one of the largest of more than a dozen remaining delivery app companies. Most of its rivals have been sold or closed down. 

Getir bought up German competitor Gorillas in a $1.2bn deal last December. It acquired the UK’s Weezy a year earlier.

The company now also faces a growing threat from the bigger delivery companies, namely Uber Eats, JustEat and Deliveroo. They have progressed to sending out groceries alongside takeaways.

Investors put more than $14bn into the rapid grocery delivery market globally over 2020 and 2021, according to analysts at PitchBook. However, last year, the value of on-demand delivery investment globally by venture capital investors sank by more than 60% to $4.7bn.