FOMO: Not Just About Parties Anymore

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FOMO, or the Fear of Missing Out, used to refer to social situations, often powered by posts on social media. One suffering from FOMO could suffer anxiety for missing an event, no matter how legitimate the reason, and this anxiety could cause significant stress.

But FOMO is not often thought of as something related to the business or financial world, and yet we now see versions of FOMO driving investment. Investors want to be the first to fund the latest, greatest thing. Take the case of the German-based tech unicorn Gorillas, a food delivery app that sky rocketed during the height of the Corona pandemic.

Gorillas shot onto the scene as not just another food delivery app, but part of the food-in-minutes trend, promising a time frame of 10 minutes from the moment you click “order” to holding the products in your hand. Add on a flashy campaign featuring fun Gorilla costumes and investors were excited.

While the connection between the company name, mascot, and business model are unclear at best, Gorillas found itself quickly expanding, thanks to huge amount of capital from investors. Venture Capital firms including Fifth Wall, Coatue, DST Global, and Atlantic Food Labs raised hundreds of millions of dollars.

However, as Gorillas expanded at a furious pace across Europe and now to the United States, cracks in the system started to appear. Cracks including security issues such as the enormous data leak, which released the information of over 200,000 customers. Phone numbers, addresses, and front door photos were easily accessed and publicly available.

On top of this, API keys for Gorillas’ SendGrid mailing provider and company Slack channel were easily accessible. In layman’s terms, this meant that attackers could easily send phishing emails and malware to customers from official Gorillas emails. It also meant that attackers could send the same troublesome messages to employees.

How is it possible that a tech start-up would have such severe security issues? Well, a report by Zerforschung, the German IT collective that first reported Gorillas’ large data leak, found out why, as featured in an investigative report.

While one would expect Gorillas to have its own software, they actually white label existing courier software all the way from Lebanon, through software developer Eddress. In short, this means that Gorillas has no control over their software, security, and customer data.

So how did a “tech unicorn” with seemingly no proprietary tech get so much money so fast? Well, that brings us back to FOMO. Venture Capital firms were SO anxious to invest in the next big boom that they did not want to miss the boat or be slowed down by due diligence procedures, procedures it is now clear would have revealed the massive security issues Gorillas continues to experience.

Gorillas is now being called a “pump-and-dump” tech unicorn due being propped up solely by funds from investors, because as company founder Kağan Sümer recently stated in a rare interview, Gorillas needs the average size of its orders to increase considerably before it can become profitable. And since the company promotes having a no minimum order requirement, it could be some time before this happens, if ever.

Yet Gorillas is not unique; in an industry where short-term profits are being prioritized over long-term growth, shaky and shady companies with significant security concerns will continue to be propped up, and consumers will be the ones most at risk when inevitable leaks occur.

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