On-demand food delivery company JOKR has announced that it is shuttering its New York and Boston deliveries as of June 19, marking the end of the company’s presence in the U.S. market. Co-founder and CEO Ralf Wenzel stated that the startup will focus on expanding its operations in Latin America.
Reasons for Exiting the U.S. Market
Wenzel explained that JOKR had decided to stop its business activities in the U.S. due to several reasons:
- The New York and Boston operations accounted for only about 5% of the company’s overall business.
- The opportunity structure in the U.S. market was "very differently structured" compared to Latin America, which presented a more attractive option for JOKR.
Latin America: A Growing Market
Wenzel emphasized that JOKR is well-positioned to take advantage of the growing demand for online grocery shopping in Latin America. The region’s 1.2 trillion retail market has less than 10% online penetration, providing a significant opportunity for expansion and growth.
Impact on Employees and Operations
The move will result in the closure of nine micro-fulfillment centers out of JOKR’s network of approximately 200 worldwide. Approximately 50 workers will lose their jobs as part of this decision.
JOKR’s Financial Performance
In its one-year lifespan, JOKR has secured over $430 million in funding, including a $260 million Series B round last November. The company’s valuation was reported to be around $1.2 billion at the time, making it one of the fastest companies to reach unicorn status.
Industry Trends
The on-demand food delivery market has faced significant challenges due to:
- Funding drying up and a surge in investments during the pandemic
- Rapid expansion leading to operational inefficiencies and high unit economics
Some competitors have already announced layoffs, including Gopuff, Gorillas, Getir, Zapp, and others. The delivery market is experiencing a correction after its pandemic-driven growth.
Conclusion
JOKR’s decision to exit the U.S. market and focus on Latin America reflects the company’s commitment to expanding in high-growth regions. As the on-demand food delivery market continues to evolve, JOKR’s strategy may serve as an example for other companies navigating industry trends and challenges.
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