British grocery startup Zapp, which has raised $300m in funding from investors including Atomico and Lightspeed, is in talks to pull out of the Netherlands, Sifted has learnt. 

The company confirmed to Sifted that it’s consulting with interested parties, including unions and employees, on proposals to exit the Netherlands, with a final decision expected next month.

Zapp has operations in both Rotterdam and Amsterdam. The team were told the news at an all hands meeting this morning.

Amsterdam has proven a particularly tricky place for speedy grocery companies to operate. Zapp says the city had forced the closure of two of its key dark stores (the buildings speedy grocery companies operate out of).

In January, the city put a one year freeze on opening new dark stores, citing noise and scooter traffic as a concern. 

The city has launched a proposal to only allow dark stores in industrial areas, which would effectively mean banning them from the city centre, and throwing the speedy grocery model, which relies on having stores close to customers, into question.  

“We remain incredibly frustrated by the lack of genuine engagement by the Amsterdam municipality over many months and the forced closure of two of our flagship Zappstores,” says Steve O’Hear, VP of strategy at Zapp.

“We have always sought to have a constructive dialogue with the City of Amsterdam and collaborate with all stakeholders to learn and improve on the way rapid delivery can meet the needs of neighbours and customers alike,” says O’Hear.  

“Our proposed exit now puts hundreds of jobs at risk and we are truly sorry for the impact it will have on our employees and loyal customers.”

Companies, including Gorillas and Zapp, have launched legal cases against the city’s decision. 

But that was a whole lot easier to do when the grocery companies were in a stronger financial position; the likely recession and tighter funding market will mean they have less in the coffers for things like legal battles.

Freya Pratty is a reporter at Sifted. She tweets from @FPratty and writes our sustainability-focused newsletter — you can sign up here.