Online food delivery pioneer FreshDirect was scooped up by rival Getir as the industry continues to consolidate following its pandemic boom, the companies announced Wednesday.
The privately held FreshDirect, launched in the Big Apple in 2002, had been sold to Netherlands-based Ahold Delhaize — owner of the Stop & Shop supermarket chain — less than three years ago for between $200 and $300 million, industry experts told The Post.
JJ Fleeman, CEO of Ahold Delhaize USA, did not disclose the terms of the Getir deal, which is expected to close at the end of the month.
“This was a difficult decision, especially given FreshDirect’s rich history in the New York City area,” Fleeman said in a statement. “However, our strength as a grocery retailer in the US is the true omnichannel experience – a combination of online and in-store.”
FreshDirect’s 3,200 employees are expected to keep their jobs, Fleeman said.
The deal will help Turkish-based Getir expand its footprint in New York City, just one of three cities — along with Boston and Chicago — where it operates in the US.
“FreshDirect will leverage Getir’s technology…to offer faster services to its loyal customer base, which will also benefit from easy access to Getir’s quick convenience service,” the companies said in a joint statement.
Getir has had its own financial struggles after scaling up too quickly during the pandemic.
The company’s valuation has fallen to $2.5 billion from $11.8 billion just two years ago, according to a Financial Times report. But Getir, which counts private equity giant Sequoia as an investor, managed to raise $500 million this year.
Still, Getir shut down service in several European countries this year after imposing massive layoffs in 2022. It also has earned the ire of legislators for a myriad of problems, including its “dark stores” and drivers who rushed to make deliveries within minutes at the expense of pedestrian safety.
FreshDirect had been criticized in recent years for botched deliveries of high-priced grocery items after being founded in 1999 in Long Island City. The company’s colorful trucks began roaming city streets in 2002 as the first grocery business to offer online shopping and delivery.
It was the brainchild of Fairway grocery chain co-founder Joe Fedele and investment banker Jason Ackerman, whose late uncle Peter Ackerman – who worked alongside “Junk Bond King” Michael Milken at Drexel Burnham Lambert – was its main investor for many years.
In 2018, FreshDirect moved to a vast 400,000 square-foot facility in the Bronx, which some experts say was a costly decision that contributed to its struggles against growing competition from a new breed of grocery delivery companies that deliver within an hour or less, including Getir.
“It’s not a surprise that Ahold Delhaize divested FreshDirect,” e-commerce consultant Brittain Ladd told The Post. “They were unable to grow the business.”
This story originally appeared on NYPost
