Delivery Hero sells its entire minority stake in Deliveroo: Here’s why

Berlin-based food delivery platform Delivery Hero SE announced that it is exiting its stake in the UK’s food delivery group Deliveroo, emphasising a “commitment to disciplined capital allocation”.

According to Delivery Hero, it has placed approximately 68 million shares in Deliveroo for £1.13 per share. 

As of Tuesday’s LSE closing bell, Deliveroo was trading at £1.21 per share, making the placement value £82,280,000 (nearly €96.35M). The sale of 68 million shares constitutes 4.5 per cent of Deliveroo’s total outstanding shares.

The placement is scheduled to settle on February 1, 2024.

“We can confirm that we have sold the entirety of our minority stake in Deliveroo. We review all of our investments on an ongoing basis and make decisions in line with our commitment to maintaining disciplined capital allocation. This ensures that we are focusing our resources wherever we see the most strategic value,” says the German company. 

Delivery Hero acquired a 5 per cent stake in Deliveroo in mid-2021 during the peak of the pandemic-driven surge in demand for food delivery services. The deal was valued at around £284M. 

In a related move, Delivery Hero announced in mid-December the closure of technology hubs in Türkiye and Taiwan. Additionally, the company revealed a 13 per cent reduction in headcount at its Berlin headquarters, aligning with the broader industry’s efforts to streamline operations and enhance efficiency.

Brief about Delivery Hero

Founded in 2011, Delivery Hero has a network of online food ordering sites operating in 70 countries across Asia, Europe, Latin America, the Middle East, and North Africa. 

It has also set its foot in the e-commerce sector to bring groceries and household goods to customers’ doorsteps in under seven minutes.

Delivery Hero reported a 9 per cent Y-o-Y growth in Gross Merchandise Value (GMV) and a 16 per cent Y-o-Y increase in Total Segment Revenue in Q3. The company aims for an adjusted EBITDA/GMV margin exceeding 0.5 per cent for FY 2023 and more than 1 per cent in H2 2023, anticipating an improved adjusted EBITDA by over €850M Y-o-Y. 

The company has also raised its FY 2023 GMV growth guidance to the upper end of 5-7 per cent Y-o-Y, emphasising its solid financial position.

About Deliveroo

Founded 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.

Collaborating with about 176,000 restaurants and grocery partners and employing around 150,000 riders, Deliveroo aims to deliver the “best” food delivery experience globally.

The company operates in 10 markets, spanning Belgium, France, Hong Kong, Italy, Ireland, Qatar, Singapore, the United Arab Emirates, Kuwait, and the UK.