LONDON, Oct 19 (Reuters Breakingviews) - Startup investors are subsidising consumers’ cravings for wine and ice cream. Companies trying to ferry such goodies to doorsteps in 15 minutes or less face a hard enough task. Delivering a profit on top is harder still. The coronavirus pandemic breathed life into a high-speed grocery delivery model that always looked marginal. Turkey’s Getir tripled its valuation to $7.6 billion in a year. Germany’s Gorillas, which was only founded last year, is now worth $2.1 billion after an investment by $33 billion compatriot Delivery Hero (DHER.DE). Traditional grocers are also piling in. Britain’s Asda is expanding its one-hour delivery services, while other supermarkets are hooking up with the likes of Deliveroo (ROO.L) and Uber Technologies (UBER.N). For consumers, speed comes at a premium. A typical order includes a 2 pound delivery fee plus a 5% markup on retail supermarket prices for basic items like bread or milk. Thus, the bigger the order, the more profitable it is. Sourcing their food at wholesale prices, delivery firms can cream off around 7 pounds from the average 20 pound order, based on a 35% markup. The problem is labour. To complete an order, companies need a warehouse picker and delivery driver. Together, they will cost around 20 pounds per hour. Thus, to break even on the above scenario, they need to complete an order every 20 minutes. For startups, the cost of attracting new customers or holding onto existing ones by, say, handing out free delivery coupons worsens the odds of getting into the black. In a company’s infancy, Bain analysts reckon a 17 pound order will make an operating loss of 24 pounds. Economies of scale should eventually address that. If the driver and the picker complete four orders an hour, their cost per order comes down to 5 pounds. Persuading punters to opt for premium items like booze or fillet steak can also bring fatter markups. That said, Bain reckons the average 35 pound order will achieve, at best, a measly 7% operating profit, from which investors still have to pay interest and tax. So why are they handing over so much cash for such little reward? One probable answer lies in more robots, either in the form of warehouse automation or delivery drones. If fast-delivery firms can leave expensive human beings on the shelves, investors may finally get something worth having. German food delivery company Delivery Hero said on Oct. 19 it had invested $235 million in Berlin-based grocery delivery firm Gorillas. The deal values Gorillas at about $2.1 billion, compared to $1 billion at its previous funding round in March. - British supermarket Asda said on Oct. 8 it would extend an online one-hour delivery service to 96 stores after a trial exceeded expectations. - Getir, a rapid grocery delivery startup, tripled its valuation to $7.6 billion in its June funding round. - Getir founder Nazim Salur said its operation in Turkey was profitable. However, he declined to provide details of the company’s revenue or profits, the Financial Times reported on Jan. 31. - British grocery delivery startup Weezy reported revenue of 161,400 pounds in 2020, against losses of 676,000 pounds, according to its financial results.