8 June 2015 - Financial Times
Delivery Hero reaches $3bn valuation on latest funding round
By Arash Massoudi in London and Hannah Kuchler in San Francisco
Delivery Hero, an online food ordering business operating in 34 countries, has reached a valuation of $3.1bn after a new financing round that makes the company one of Europe’s most highly valued startups. The Berlin-based company raised $110m from two US-based funds as it prepares for a possible listing and looks to take on rivals such as the UK’s Just Eat amid a land grab in the food delivery services sector, according to people familiar with the matter.
Founded in May 2011 by serial entrepreneurs Niklas Östberg, Lukasz Gadowski and Markus Fuhrmann, the network now includes over 200,000 restaurants and processes more than 10m orders each month. Consumers craving convenience have turned to food delivery apps which quickly connect them with a huge range of takeaway food services, cutting out the shopping, cooking and even leaving the house required for daily meals. Research from Euromonitor estimates the global market for home delivery and takeaway food could reach $104.7bn by 2018, up 16 per cent from today.
Delivery Hero and its rivals are turning to dealmaking to shore up their positions in this fastgrowing market. So far this year Delivery Hero has struck deals to acquire the Turkish food delivery brand Yemeksepeti in transaction valued at $589m and also acquired Middle Eastern operator Talabat.com. Meanwhile, Just Eat last month bought Menulog, the market leader in online takeaway delivery in Australia and New Zealand, for £445m.
At a valuation of $3.1bn, Delivery Hero sits just below its publicly traded US counterpart GrubHub, which has a market capitalisation of $3.3bn. GrubHub, which acquired its main rival Seamless in 2013, now has 35,000 restaurants in over 900 US cities and London.
Just Eat has a market value of £2.85bn and Priceline paid $2.6bn last year for OpenTable, the restaurant booking app. The Delivery Hero round is expected to be disclosed on Monday. Delivery Hero, founded in 2011, is already backed by a number of funds including Rocket Internet, the German startup investor group, which has built a large stake in the company this year and owns almost 40 per cent. Its other backers include Insight Venture Partners and the private equity group General Atlantic. The startup’s valuation has increased 159 per cent since September 2014, which valued it at $1.2bn. Since then, it also raised a further €287 million from Rocket Internet in February at an undisclosed valuation.
Citigroup and the law firm GLNS advised on the capital raising.