JOKR confirmed on Tuesday that it has shut down its on-demand food delivery operations in both Santiago, Chile and Medellin, Colombia, laying off 22 employees and 19 workers in those markets, respectively.
The company said via email that the move will “further reduce our geographic footprint into those markets that have achieved the greatest scale and thereby strengthen our path to profitability. As difficult as these changes are, they will help us become a more successful, sustainable and sustainable company.”
Profitability challenges in grocery delivery startups are not new. Companies have struggled to come up with a business model that could generate meaningful revenue, even if customers just ordered a bunch of bananas or a gallon of milk.
Co-founder and CEO Ralf Wenzel revealed in April that JOKR reached gross profit status, but that peak didn’t last long. A few months later, he hit the headlines again, saying the company was closing its US presence to focus on Latin America, where it operated in countries like Mexico, Colombia and Peru.
The closure of the markets in Santiago and Medellin is not a complete surprise.
In September, The Information reported that JOKR was in talks with investors with a goal of raising up to $50 million, which would value the company at $1.3 billion. This would be a slight increase from the company’s $1.2 billion valuation following the $260 million increase announced last November.
The Information article also noted that the company was losing nearly $10 million a month and that even if it raised the entire $50 million, the capital wouldn’t give the company much of a job. Excluding that fundraising effort, JOKR raised a total of $430 million, including debt.
Meanwhile, the company said it “remains focused on the great opportunities in our current markets and is confident in our unique value proposition in this region.”
“JOKR is deeply grateful to its team and our customers and local communities for their continued support and is committed to helping employees through their transition,” it added.
