Berlin-based food delivery platform Delivery Hero announced that it has signed an agreement to acquire a majority stake in Barcelona-based on-demand delivery startup Glovo. The German company will also acquire an additional 39.4 per cent stake in Glovo in exchange for Delivery Hero shares.
Both companies, operating in quick commerce, believe that together they can further strengthen their leadership positions as well as drive innovation to shape the future of delivery. In June 2021, Delivery Hero and Glovo were both founding members of the European Purpose Project and have been leading the European discourse on the future of platform work.
Transaction overview
Delivery Hero has been an investor in Glovo for many years and currently holds approx 44 per cent interest on a non-diluted basis. The deal is expected to close in the second quarter of 2022. In exchange for the Glovo shares, Delivery Hero will issue its own shares to the seller at a fixed exchange ratio.
After the deal is closed, Glovo will continue operations with their existing brand and platform under their current management team led by its two founders who will remain invested in Glovo. Together with Delivery Hero, they will leverage shared technology to further improve efficiencies and accelerate product development.
CEO and co-founder of Delivery Hero Niklas Östberg says, “The Delivery Hero team has admired and supported Glovo for many years. They have been frontrunners in the industry by offering a multi-vertical service from the start. We will continue to invest in Glovo’s team and product, and see many opportunities to further enhance their operations with our resources and expertise.”
What does Glovo offer?
Founded in 2015 by Gerard Olive, Miguel Vicente, Oscar Pierre, and Sacha Michaud, Glovo connects customers with independent local couriers who acquire goods from any restaurant or shop in a city. Besides, it also delivers urgent packages for a variable fee.
The platform reports that it has delivered more than 190 million multi-category orders globally to date. Glovo claims to hold leading positions in 16 of its 25 markets, which accounts for more than 70 per cent of its Gross Transaction Value (GTV), and has a run-rate of approx €3B in GTV with an annual organic growth rate of 80 per cent in 2021 and €800M in revenue.
The company operates in over 1,300 cities in 25 countries across Europe, Central Asia, and Africa. It has approx 15 million active users annually with 70,000 monthly active couriers and 130,000 monthly active partners.
Speaking on the development, Oscar Pierre says, “With the markets we cover today, we can serve a total population of more than 700 million people. I believe our potential is untapped, and I’m happy to have found a partner that matches our ambition, culture, and will keep supporting this adventure we’ve embarked on to drive innovation further, strengthen our multi-category offering, and create additional value for all our stakeholders, and the industry.”
Delivery Hero’s recent developments
In December 2021, Delivery Hero announced that it is looking to scale down its foodpanda Germany, as well as has plans to divestiture foodpanda Japan in Q1 2022.
According to a statement, foodpanda Germany will exit six German cities including Cologne, Düsseldorf, Frankfurt, Hamburg, Munich, and Stuttgart, while an innovation hub will remain in central Berlin which will focus on piloting new product features and technologies for the delivery industry.
Delivery Hero looks to shift its resources to markets where the growth is ‘highly attractive’, especially in quick commerce, that are expected to generate more value for the ecosystem and shareholders.
The company has informed all relevant stakeholders and, where possible, foodpanda employees will transfer to positions within the Delivery Hero Group, its industry partner network or receive a severance package.
Niklas Östberg says, “Scaling down our operations in Germany and planning to divest our Japanese business have not been easy decisions. Facing a very different reality now than we did entering these markets, it is with a heavy heart that we need to pursue other growth opportunities with larger potential. Despite having built up two fantastic foodpanda teams showing great progress, it has become increasingly difficult to create true value for our ecosystem in these countries.”
About Delivery Hero
Founded in 2011, Delivery Hero has a worldwide network of online food ordering sites operating in 40 countries across Asia, Europe, Latin America, the Middle East, and North Africa. The company 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 has been listed on the Frankfurt stock exchange since 2017 and became part of the leading index DAX (Deutscher Aktienindex) in 2020. The company is backed by investors including Insight Venture Partners, Luxor Capital Group, Kite Ventures, Team Europe, ru-Net, Tengelmann Ventures, Point Nine Capital, Vostok Nafta, and Phenomen Ventures.
In August 2021, the Berlin-based startup had also acquired a 5.09 per cent stake in its UK-based rival Deliveroo.
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