The use of delivery apps and services like Doordash, UberEats and Jokr has been a lifesaver for many during this pandemic. The providers ensure that their customers’ needs are met even when others can’t reach them physically in order to purchase products online with ease. However, Jokr revealed it had plans to slowly cease U.S. delivery operations and shift focus elsewhere.
The company has notified its partners that it is shifting focus to Latin America markets, which they believe will be more profitable. Additionally, Jokr will be pulling the plug in Boston and New York.
“We have decided to stop our business activities in the U.S. for now, which have lately only accounted for about 5% of our business,” said Chief Executive Ralf Wenzel on Wednesday. “Latin America is particularly underpenetrated and underserved, that’s why Jokr has put its focus and emphasis on the Latin American opportunity since the beginning.”
Jokr announced that it will be closing nine fulfillment centers and cutting 50 workers, which accounts for only 5% of their global workforce. The decision to close these facilities comes after months upon cancellation from both Boston-based operations as well New York City counterparts.
Jokr has a base in New York and headquarters in Luxemburg. Bloomberg reported that despite the halt to serving customers, this would not affect all the employees working for them in the New York base as they will be retaining some people.
The company is still active in South American countries, but it has cut back its delivery services across Europe.
Months ago, Joker was reported to have raised $269 million in Series B funding at a $1.2 billion valuation.
Jokr’s most recent effort to increase revenue was through the use of advertising in their app and delivery bags.
In an effort to make up for lost revenue, grocery delivery companies have had trouble with the economics of their model. A report estimated that on-demand services lose as much at $20 per order.