Local delivery platform Delivery Hero has announced that it would acquire the Latin America operations of Glovo – a Barcelona-based on-demand delivery startup – for up to €230M, including a €60M performance-based earn-out. The deal also includes a performance earn-out and the transaction between the two companies is expected to be completed within the next few weeks, if fulfillment conditions and regulatory approvals go as planned.
Glovo’s operations in some LatAm countries to go on until March 2021
Under the acquisition deal, Delivery Hero will take over Glovo’s entire operations in Latin American countries. This includes Argentina, Peru, Ecuador, Panama, Costa Rica, Honduras, Guatemala and the Dominican Republic. It is worth noting that Delivery Hero already has a presence in Argentina, Panama and the Dominican Republic, and the newly acquired assets in these markets will be transferred to Delivery Hero at the closing of this deal.
With this acquisition of Glovo’s operations in Peru, Ecuador, Costa Rica, Honduras and Guatemala, Delivery Hero will now be offering its service in five new countries. Under the terms of the deal, Glovo will continue to operate in these aforementioned countries until March 2021.
Niklas Östberg, CEO and Co-Founder of Delivery Hero, says, “Latin America is a region with exceptional growth potential for online delivery. Acquiring Glovo’s local operations gives us the opportunity to double down on our efforts to drive innovation, continuously improve customer experience and support local vendors in the region. We have been working closely with Glovo for many years, and are proud to incorporate their Latin American services into our global network.”
Headquartered in Berlin, Germany, Delivery Hero has more than 27,000 employees. It is listed on the Frankfurt stock exchange and became part of the leading index DAX (Deutscher Aktienindex) in 2020. It has a strong presence in 39 out of 44 countries in which it is operating across Europe, Latin America, Asia, the Middle East and North Africa. Delivery Hero also operates its own delivery service primarily in over 600 cities around the globe.
Trimming down to enhance efficiency
Glovo started its operations in 2015 and as per Dealroom, its current valuation stands at a notable €1.0B. After a few notable funding rounds, the company has sold its LATAM operations to “focus on key markets”
“We feel that it’s important to focus on key markets where we can build a long-term sustainable business and continue to provide our unique multi-category offering to our customers. This deal will allow us to strengthen our presence in those markets where we are already very strong, while also allowing us to invest in new markets where we see huge growth potential and opportunity,” says Oscar Pierre, CEO of Glovo.
Glovo operates in over 650 cities in 22 countries across EEMEA, LATAM and Sub-Saharan Africa. According to the company, it has more than 2.5 million monthly active users, 50,000 active couriers and over 50,000 associated partners worldwide.
In addition, Glovo has recently secured a convertible €120 million loan that was issued by Lugard Road Capital and Luxor Capital. The company says it will now focus its efforts on investing in its core markets and consolidating its leadership positions.
Image credits: Delivery Hero