Delivery startup JOKR, which aims to bring food and essentials to NYC doorsteps in 15 minutes, is reportedly scouting buyers for its city operations due to the exorbitant costs of doing business there, The Information reported, citing sources with insider information.
New York City comprises the majority of JOKR’s U.S. business, but mounting losses since it launched there in June is prompting the startup to enter discussions with potential buyers, the sources said.
Gopuff, Getir and FastAF are some of the competitors JOKR reportedly has connected with regarding the sale of its city operations.
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JOKR isn’t the only delivery firm looking to exit NYC. Instant delivery startup 1520 went belly-up after running out of cash in its NYC-only delivery operations. There’s also been chatter that other firms could leave the NYC market over the cost of doing business there. Rival Fridge No More was in talks to sell its operations to Gopuff.
The exit from NYC was initiated by JOKR’s investors, who pressured CEO Ralf Wenzel to concentrate the company’s efforts on Latin America, which has fewer competitors and cheaper labor and other costs.
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Aside from NYC, JOKR has U.S. operations in Boston. The company said it was losing about $159 per order in the U.S., with over one-third due to marketing costs, per data sent to investors.
The delivery startup has a presence in Latin American and European cities — Mexico City; Lima, Peru; São Paolo; Warsaw, Poland; and Vienna.
The company’s last valuation was estimated $1.2 billion in December following a $260 million funding round, PYMNTS reported.
Before launching JOKR, Wenzel was the CEO and founder of FoodPanda, chief strategy officer at Delivery Hero and managing partner at SoftBank. Earlier last month, the German entrepreneur reportedly approached Gopuff about buying the New York business, per the report.
JOKR’s model has high upfront costs in the U.S., paying workers as full-time employees. The cost of warehouse space in NYC is also higher than most anywhere else.
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