Recently, shares of UK-based Deliveroo jumped up to 10 per cent after it disclosed that the German rival Delivery Hero acquired a 5.09 per cent stake in it. The move comes as the Berlin-based online food ordering platform looks to take advantage of the sector and post-lockdowns growth. Consequently, Deliveroo has hit its highest share price since its stock market debut.
To reiterate, Deliveroo made its stock market debut in the London Stock Market exchange a few months back; however, it did not go as expected. The UK company’s shares had plunged as low as 30 per cent within the first 20 minutes of trading, wiping out around £2.3B (approx €2.7B) in market value.
Having said that, on Monday, the company’s share opened at £3.36 (approx €3.97) per share, before rising to £3.60 (approx €4.25) per share. On the other hand, Delivery Hero shares, which are traded on the Frankfurt Stock Exchange, fell over 1 per cent, following the announcement.
In an interview with The Financial Times, Jefferies analyst Giles Thorne says, “It is hard to say with conviction at this point what Delivery Hero’s intention is behind this latest minor stake take-up.”
Deliveroo’s exit from Spain
A few days back, Deliveroo has also announced its proposal to end its operation in Spain as the government adopted a new law that requires food delivery platforms to hire their couriers.
Deliveroo said its decision to withdraw from Spain remains subject to a full consultation with impacted employees and riders, which will begin in September and last around a month.
Competition
At present, Deliveroo and Delivery Hero do not compete in the UK market. In fact, the Berlin-based company sold its UK operations, Hungryhouse, to Just Eat in 2016.
It’s worth mentioning that both Deliveroo and Delivery Hero do compete directly in the Middle East through the latter’s Talabat business, and in Hong Kong and Singapore via its Foodpanda division.
Notably, Delivery Hero owns minority shares in various food delivery companies globally including Just Eat Takeaway, Glovo, Rappi, and Zomato.
About Delivery Hero
Delivery Hero is a global online food ordering platform, operating in 40 across Asia, Europe, Latin America, the Middle East, and North Africa. The company started as a food delivery service in 2011 and today runs its delivery platform on four continents.
Additionally, Delivery Hero is pioneering quick commerce, the next generation of e-commerce, aiming to bring groceries and household goods to customers in below one hour and often in 10-15 minutes.
Earlier this year, the company launched its independently managed early-stage venture capital fund – DX Ventures to invest in disruptive founder-led companies.
In January 2021, the Berlin-based food delivery platform raised €1.25B by issuing 9.44 million new shares to institutional investors at €132/share, increasing its current share capital by around 4.7 per cent.
Headquartered in Berlin, Germany, the company has more than 27,000 employees. Delivery Hero has been listed on the Frankfurt stock exchange since 2017 and became part of the leading index DAX (Deutscher Aktienindex) in 2020.
About Deliveroo
The company was launched in 2013 by William Shu and Greg Orlowski. Deliveroo owns and operates an online food delivery platform in the UK. Its platform allows users to order food from local restaurants. Deliveroo operates in over 500 towns and cities across 12 markets, including Australia, Belgium, France, Hong Kong, Italy, Ireland, Netherlands, Singapore, United Arab Emirates, Kuwait, and the UK. It has over 2,000 employees worldwide.
In 2020, more than 46,000 restaurants joined the platform, and the company now works with more than 140,000 restaurant partners globally. Furthermore, the company partnered with major supermarket brands including Waitrose, Sainsbury’s, Morrisons, Aldi, and Carrefour to grow its on-demand grocery offering amid the pandemic.
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