Gorillas, a Berlin-based local deliveries start-up that has recently launched in the UK is reportedly raising $1 billion in new capital to fund international expansion. The round is reportedly likely to value the loss-making company at over $5 billion, or £3.5 billion.

Competition in the new market for app-based rapid local delivery services is increasing with venture capital stepping up its backing of the companies it sees as best placed to come out on top. Gorillas, like its competitors Getir, Weezy, and Zap, lets users order groceries from local supermarkets or stores, or food from restaurants, promising to deliver goods within minutes.

Gorillas promises to deliver groceries orders within just 10 minutes. It is able to do so by operating ‘dark’ convenience stores that serve a small surrounding area. As soon as an order comes in it is quickly put together from shelves of products ordered by popularity rather than category (eg. dairy products, breakfast cereals etc.). Delivery riders then skip through traffic on bikes to drop orders off at local addresses.

Founded just a year ago in May 2020, Gorillas became the fastest ever European start-up to achieve ‘unicorn’ status, a valuation of over $1 billion, when it closed a $290 million funding round in March. That round, just 10 months after the company was established, was led by Chinese tech giants Tencent, DST Global and Coatue Management.

But Gorillas is now reportedly ready to go back to venture capital and private equity markets again less than three months later. This time the target is to raise $1 billion to fund expansion of the network of “dark stores” it operates in densely populated European cities like London, Berlin and Paris.

Gorillas’ stated aim is to ‘disrupt’ the convenience store market. Founder Kagan Sumer is convinced traditional groceries retailers are designed with their own needs often taken precedence over those of their customers. Gorillas, which makes deliveries on electric bikes and already employs over 1000 riders, last year hired former Lidl UK chief executive Ronny Gottschlich as its chief commercial officer.

UK supermarkets that don’t have their own delivery service, like Waitrose, Morrisons and the Co-Op now use Deliveroo for quick deliveries. Gorillas has a different model to Deliveroo because it operates its own ‘dark’ stores, rather than simply providing the delivery service for other companies.

The start-up has quickly expanded to a number of urban locations in Germany and the Netherlands, as well as Paris, Milan, London and Manchester. For now, 15 areas of London are covered, including Shoreditch, Maida Vale and Nottinghill, Battersea, Kentish Town and Tottenham. In Manchester, deliveries are made within the Piccadilly and New Islington region.

Another major difference between Gorillas and other app-based delivery companies like Deliveroo and Uber Eats is that delivery riders are not ‘gig economy’ workers paid per delivery. They are employed and paid £11.50 an hour plus tips.