Rapid grocery delivery firm Gorillas is looking for a fresh $500m funding injection to fuel its growth as investor cash continues to pour into the sector.
Berlin-headquartered Gorillas has called in bankers at JP Morgan to tempt in new backers for a round that could value it at more than $5bn, The Times first reported.
The firm, backed by Chinese tech giant Tencent, bagged a $1bn round in October that valued it at over $3.1bn to accelerate a global push in an increasingly crowded sector and heavily funded sector.
Investor cash has been pumped into the space after the pandemic sparked a boom in demand for home delivery groceries.
Turkish rival Getir raised $768m earlier this month from investors including US giants Sequoia Capital and Tiger Global, valuing it at nearly $12bn, more than established UK supermarket giants like Sainsbury’s.
Gorillas, Getir and US rival GoPuff operate via so-called ‘dark stores’ where drivers collect groceries and deliver them in a matter of minutes.
Gorillas currently has 200 dark stores in the UK as well as a presence in Germany, Netherlands and France, and has also recently trialled a partnership with Tesco to provide rapid delivery services.
Well-stocked coffers have allowed the rapid delivery firms to vie for market share with generous discounts and customer deals, but profitability is still expected to be some way off.
The funding frenzy also comes at a time when investors on the public markets are increasingly questioning the lofty valuations of growth oriented tech stocks.
Deliveroo, the more established takeaway delivery firm, has had a torrid time since floating in London last year, with its share price falling 70.6 per cent from its August peak.
Boss of the Deliveroo Will Shu said it was aiming to hit profitability within the next two years but warned that growth in transaction volumes would slow to 15-25 per cent, compared with 70 per cent in 2021.
Soaring food prices and rising wages have ramped up costs for delivery firms.