Gorillas has halted its US expansion and sacked employees in an effort to “achieve sustainable growth”.
It comes despite an expected $950 million funding round that would take the grocery startup to a $3 billion valuation.
According to Business Insider, it will instead focus on building its business in New York, where it launched in May.
It marks a dramatic change of pace for Gorillas, the fastest European startup to reach “unicorn” status.
Conquering the US has been a key aim of the firm, which has launched in eight European countries since it was founded last year.
A $400 million deal with delivery giant DoorDash reportedly fell apart this summer after Gorillas chafed against plans to slow its American expansion.
It found another major investor in takeaway titan Delivery Hero, which contributed $235 million to an almost billion-dollar funding round.
Gorillas claimed to be taking its eye off the US for just a few months, but this could give rivals an opportunity to take over the market.
Getir, a Turkish on-demand grocery service, plans to operate in New York, Boston and Chicago by the end of the year.
Jokr, which already competes with Gorillas in New York, hopes to launch in several cities within three months.