The food delivery service Flink does not come to rest. At the weekend, the Financial Times reported on takeover talks by Turkish competitor Getir. The search for fresh investors for a new round of financing is proving difficult. In addition, new details about the start-up's austerity policy are coming to light. As the "Manager Magazin" reports, Flink has shrunk its workforce from 21,000 to almost 13,000 employees in the past twelve months – mainly due to the fact that positions have not been filled. The job cuts are said to have affected all areas of the company, from drivers to employees in warehouses to positions at headquarters. At the request of the F.A.Z., Flink said that it did not comment on "any market speculation or rumors".
Maximilian Sachse
Editor in the economy
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However, the shrinkage course fits into the picture. During the pandemic, food delivery services such as Gorillas, Flink, and Getir experienced a ramp-up. However, there is fierce cut-throat competition in the industry. Moreover, the business is still not profitable. Often, the average shopping carts are still less than 20 euros. The value must be at least two to three times higher in order to be able to work profitably, according to market observers such as Shikha Ahluwalia, an online trading expert at British venture capitalist Balderton. In addition, companies are struggling with rising prices and high personnel costs.
Flink repeatedly withdrew from unprofitable markets last year. In Austria, the start-up closed all its warehouses and filed for bankruptcy for its subsidiary there at the end of 2022. A planned expansion into Belgium was also cancelled.
Is Abu Dhabi's sovereign wealth fund pushing ahead with a merger?
Berlin-based competitor Gorillas ran out of money at the end of last year due to its unprofitable business model and fierce competition, followed by an emergency sale to Getir. Market observers expect even more consolidation. This is also supported by the fact that Abu Dhabi's sovereign wealth fund, Mubadala, is invested in both Flink and Getir. Mubadala is said to be a fan of the idea of merging the two providers. However, the talks are probably not very concrete so far, Flink prefers a new round of financing.
Flink's investors are putting pressure on the company to become profitable as quickly as possible. This is not unusual at the moment. After the long years of low interest rates, lenders have been paying more attention to profit and less to growth for several months now. In 2022, Flink generated sales of 400 million euros, a fivefold increase on the previous year's sales. However, Flink is not yet generating profits. This is set to change in the fourth quarter of 2023, at least for the German business, which accounts for half of sales. The entire company is expected to become profitable one year later.
But until then, Flink needs fresh money. In financial circles, there was initially talk of a financing round of 200 million euros, the "Handelsblatt" recently reported only plans to collect 150 million euros. Existing investors such as the food retailer Rewe and the American delivery service Doordash are on board. But the current market makes it difficult to find new investors. It is certain that Flink is facing a significant devaluation. In the last financing round in December 2021, the delivery service was still valued at $3 billion.