Contxto – January 2020 was not friendly towards massive growth startups, as Glovo recently learned.
Near the end of this first month, the Spanish last-mile delivery startup is retreating from two Latin American countries.
And it’s not the first time it does so in the region. In April 2019, after two years of operations, Glovo withdrew from soccer player Arturo Vidal’s home country of Chile.
Related article: Glovo leaves Chilean market behind after financial hardships
The Glovo that got away
As per its recent announcement in January 2020, the Spanish startup will be departing from Uruguay and Puerto Rico. It’s also retreating from Turkey and Egypt.
With all this, Glovo is reduced to 22 markets with priority set on South America, southern and eastern Europe and Africa.
“This has been a very tough decision to take,” explained Oscar Pierre, Glovo’s Co-founder and CEO, “but our strategy has always been to focus on markets where we can grow and establish ourselves among the top two delivery players while providing a first-class user experience and value for our Glovers, customers, and partners.”
A familiar story
However, the comment made by the executive that stood out the most is regarding profitability. Unsurprisingly, it’s the same matter that determined Glovo’s departure from Chile.
“Leaving these four markets will help us to further strengthen our leadership position in South West and Eastern Europe, LatAm and other African markets, and reach our profitability targets by early 2021,” stated Pierre.
This is an all too familiar story faced by another last-mile delivery startup, Rappi.
Glovo is not the first startup of the year that will be forced to stop mass expansion to be profitable.
And it probably won’t be the last.
Wanna hear more? We recommend you listen to the following podcast episode: Reguladores contra emprendedores. You can find the time stamp available in the description.
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