Two companies, born in the heart of emerging markets — Turkey’s Getir and the UAE’s Kitopi — represent ambitious ventures that scaled quickly, attracted significant funding, and set their sights on global markets. Despite their similarities in origin and aspiration, both faced significant hurdles when expanding beyond their home regions. Their journeys provide invaluable lessons for startups, particularly those in the MENA region and Turkey, as they navigate the pressures of rapid scaling and foreign market entry.
Regional Roots: A Shared Starting Point
Both Getir and Kitopi hail from regions characterized by:
- High entrepreneurial potential: Emerging markets like Turkey and the UAE have witnessed a surge in innovative startups in recent years.
- Dynamic consumer behavior: These markets share similarities in cultural habits, including a growing reliance on convenience and tech-driven solutions.
- Unique market conditions: Limited competition within certain sectors creates opportunities for startups to dominate locally before expanding globally.
Ambition Meets Reality: Rapid Growth and Its Consequences
Getir’s Journey
Founded in 2015, Getir pioneered the ultra-fast grocery delivery model and rapidly expanded across Europe and the United States. Getir’s funding journey includes:
- Series A to Series D: By March 2021, Getir raised over $1 billion across multiple rounds, with valuations soaring to $7.5 billion.
- Valuation Decline: By September 2023, its valuation plummeted to $2.5 billion due to declining consumer demand and operational challenges.
- Backers: Key investors included Mubadala Investment Company and Sequoia Capital, among others.
However, challenges arose:
- Post-pandemic consumer behavior shifts: The drop in demand for delivery services affected profitability.
- Overextension: Entering multiple international markets strained resources.
- Stakeholder disputes: Misalignment with investors led to restructuring conflicts and legal disputes.
Founded in 2018, Kitopi’s managed cloud kitchen model attracted global attention. Its funding milestones include:
- Series B: Raised $60 million in early 2020 to expand operations into the U.S.
- Series C: Secured $415 million in July 2021, elevating its valuation to over $1 billion, achieving unicorn status.
- Current Focus: Focused on Middle Eastern markets after halting U.S. expansion.
Yet, its journey faced significant setbacks:
- Pandemic impact: The COVID-19 outbreak disrupted operations, particularly in the U.S., forcing Kitopi to halt expansion plans.
- Strategic pivot: The company refocused on its core markets in the Middle East, leveraging its unicorn status for regional growth.
Comparing the Challenges
- Market Dynamics
- Investor Relations
- Focus and Adaptability
Lessons for Founders and Investors
From these two case studies, startups can derive several critical lessons:
1. Understand the Risks of Overexpansion
Scaling too quickly across diverse markets can strain resources and dilute focus. Startups must prioritize calculated expansion over rapid, unsustainable growth.
2. Align with Investors
Disagreements with stakeholders can derail even the most promising ventures. Clear communication and shared visions are essential for long-term success.
3. Adapt to Market Dynamics
External factors, from pandemics to economic shifts, are inevitable. Startups must remain agile, ready to pivot strategies when circumstances change.
4. Focus on Core Strengths
Startups that double down on their home markets or areas of expertise often find greater success. Expanding regionally before going global can provide a stronger foundation.
Final Thoughts
Why do some startups falter at their peak? Often, it’s a mix of external challenges, internal missteps, and the high stakes of global expansion. Founders and investors must remember that growth is not just about raising money and entering new markets; it’s about building resilience, maintaining focus, and navigating the complexities of international scaling with care and foresight.
As the startup world evolves, learning from the journeys of companies like Getir and Kitopi can illuminate pathways to more sustainable success.