Summary

Many VC investors perceive dark stores – the foundation for 15-minute grocery delivery startups – as a new business model with unproven unit economics and limited scaling potential. We are more optimistic. CM Ventures is an early investor in Buyk (we co-led their seed round) – so we obviously have skin in the game, but we have been following the model for quite some time and have extensively researched and benchmarked the space, having spoken with more than 30 emerging players.

In this article, we answer the main questions about dark stores, drawing our conclusions primarily from data on the four, already established, dark store operators with ca. $3B in revenue run-rate. Three of them are part of publicly traded groups - Delivery Hero (Dmart), Yandex (Yandex.Lavka), and Mail.ru Group (Samokat) - while Getir is still private and has been valued at $7.5B. To supplement our findings, we leveraged our proprietary data platform to identify and screen around 100 emerging companies in this market.

1. The 'Big Four': the largest dark store players show the scale

In 2021, the term dark store was firmly entrenched in news about startup investment rounds. Companies like Gorillas, Dija, Flink, Jokr and others attracted the attention of the startup community. However, fewer people have been paying attention to the fact that the dark store business model has been working well in the market since 2015 with mostly overlooked large well-established public and private players, and there have been even M&A in this sector.

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Chart 1: the largest dark store operators by number of stores

Getir

Getir - the pioneer of the dark store model - launched in Turkey in 2015 and recently expanded to other markets (starting with the UK). Though the company is private and metrics are not publicly disclosed, media reports that it has revenue of at least $800M and a $7.5B valuation, making it one of the most mature players in the space.

<aside> πŸ“Œ Revenue: ~$800M annualized as of May 2021

**Number of stores: 500 in 30 Turkish cities as of June 2021 and at least 100 stores planned in the UK by end of 2021. The most recent data says Getir has launched 28 stores in the UK year to date

Number of orders: 9M monthly as of May 2021

Revenue per store per year: ca. $1.5M

SKU's: 1.5k

Source: public sources

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There are no available numbers on Getir's profitability in Turkey, but, based on conversations with investors and the fact that Getir did not raise much before 2021, we would assume that the economics work pretty well in its home market.

What is most remarkable when thinking of the profitability of the business model at scale, is that the Turkish market is more competitive than it is perceived - Dmart has something around 30-40% of a market share, competing directly with Getir. This means that the economics could work even if there is more than one player in the market - the same is seen in Russia (see below).

Dmart