Friday 18 October 2019

Amazon leads $575m funding round to take Deliveroo stake

Delivering results: Deliveroo rider carrying a box with its kangaroo logo
Delivering results: Deliveroo rider carrying a box with its kangaroo logo

Kate Holton

Amazon has taken a stake in online food delivery company Deliveroo, leading a $575m (€514m) fundraising to pit itself against Uber Eats in the global race to dominate the market for takeaway meals.

The news the world's biggest online retailer had bought into one of Europe's fastest growing tech companies sent shockwaves through the sector, hitting shares in European rivals Just Eat, Takeaway.com and Delivery Hero.

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The online giants are betting that the takeaway market will expand as it branches out from fast, unhealthy meals to nutritious dishes.

They believe that they have the scale to beat smaller rivals which are still largely sacrificing profits to grow.

Deliveroo founder and CEO Will Shu said the fundraising would enable the loss-making group to increase its reach, develop technology and pursue innovations such as expanding its own kitchens that can be rented to restaurants to meet demand.

Deliveroo did not give a figure for Amazon's contribution. It has now raised $1.53bn to date, helped by existing investors T Rowe Price, Fidelity Management and Research Co, and Greenoaks.

"Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organisation," Mr Shu said.

The former Morgan Stanley banker launched Deliveroo after moving to London from the US and finding a lack of delivery options when working late.

He says he still delivers meals once a week to understand the job of the rider.

Headquartered in London, Deliveroo uses 60,000 riders to deliver meals from more than 80,000 restaurants and takeaway outlets in 14 countries including Ireland, France, Germany, Hong Kong, Singapore and Kuwait.

Its "Frank" algorithm links the restaurants and riders with the customer, based on location, to cut the time of delivery.

It competes in its home market with online platform Just Eat and with Uber Eats in North and South America, Europe, Asia and Africa.

It also competes with the loss-making Takeaway.com platform in 10 European countries and Israel, and Germany's Delivery Hero.

Reuters

Irish Independent

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