Deliveroo is an online food delivery company in over 500 cities and towns worldwide. Founded in 2013, the company has emerged as a significant player in the online food delivery.
Recently, Deliveroo announced that it has raised $385M in funding which it plans to use for expanding its operations globally. In this article, we will look at an overview of Deliveroo, its recent funding, and what it plans to do with this capital injection.
What is Deliveroo?
Deliveroo is a global online food delivery platform, connecting customers with nearby restaurants and other culinary partners for delivery. The company was founded in 2013 by William Shu and Greg Orlowski to bring high-quality meals, from a diverse range of local restaurants, to customers’ doors within 30 minutes.
The company provides customers with an extensive selection of traditional and specialty cuisines. Through Deliveroo’s comprehensive logistics system, riders deliver orders directly to homes or workplaces. Additionally, the company offers customised software that simplifies ordering and payment processes and rider tracking capabilities.
Deliveroo operates in over 500 towns and cities across 12 countries worldwide including the UK, Ireland, Australia, France, Germany, Belgium Luxembourg and the Netherlands. In December 2018 , Deliveroo raised $385 million in Series F funding to expand its operations globally, enabling it to increase its geographical coverage while continuing its commitment to outstanding customer service.
Overview of Deliveroo’s operations
Deliveroo is a food delivery platform that enables customers to order meals from restaurants for home delivery. Founded in London in 2013, Deliveroo has rapidly become one of the leading players in the digital food delivery space with operations across 13 countries: Australia, Belgium, France, the Netherlands, Hong Kong, Ireland, Italy, Kuwait, Singapore, Spain, United Arab Emirates (UAE), United Kingdom (UK), and Germany.
As of October 2020, Deliveroo had 4 million active users on its platform and over 30 thousand restaurant partners. It has created an ecosystem of food service professionals – like riders who deliver meals to customers and restaurants that fulfill orders through their kitchens or dark kitchens – a unique offering made possible through technological innovation.
Deliveroo’s business model is based on two main revenue streams: deliveries and orders from affiliated restaurants (referred to as ‘Roo Deeds’). For each order placed or completed on its platform the company charges commissions to either the restaurant or customer depending on their agreement. In addition Deliveroo offers services such as loyalty and marketing programs that generate further commission sales.
The company recently announced it had raised $385M of new funding in October 2020 which was used to accelerate its global expansion plans – launching new markets such as Germany – and invest in technology and service infrastructure required for next-level customer experience development.
Deliveroo Raises $385M in Funding
Deliveroo, a food delivery company, has just announced a new round of funding to $385 million. This is a huge boost for the company, which they plan to use to expand their operations globally. According to Deliveroo CEO Will Shu, this funding will give the company “the resources needed to create a world-class company and build a business that serves everyone.”
This is a positive development for Deliveroo and its customers, as it will expand its reach and capabilities. Let’s have a look at what this funding means for Deliveroo:
Investors involved in the funding round
Deliveroo has announced a massive $385 million funding round – the largest ever in Europe’s market delivery sector. The funding, backed by eight investors including Toscafund, Dragoneer Investment Group, Fidelity Management and Research Company, Greenoaks Capital and Lead Edge Capital marks Deliveroo’s sixth fundraising round since the company was founded in 2013. With the latest fresh capital injection, Deliveroo has raised over $1.53 billion since inception.
The latest funding announcement is great news for the company as it attempts to bring its unique ‘editions’ concept to more countries worldwide. Developed with unoccupied restaurant sites in mind, this concept seeks to allow riders to order food from virtual restaurants that may not exist in physical locations. Deliveroo aims to expand into at least two new markets this year with the new capital raised and grow its existing presence in over 500 locations worldwide.
Specific investors involved in this particular round include:
- London-based M&G Investments which is reported to hold a £128M stake.
- California-based A/O Proptech which acquired shares of £64M.
- San-Francisco based Dragoneer Investment Group with a £128M investment stake.
- Bridgepoint Europe LLP (holding 10% of ordinary share capital).
- Unnamed involvement from Fidelity Management & Research Company and North Island.
- Private investments from Willis Towers Watson & Company Limited (6%).
How will Deliveroo use the new funding?
Deliveroo has announced it has secured $385 million in Series G funding. The new capital will be used to expand Deliveroo’s presence globally, develop emerging markets, and invest in its services for riders and restaurants.
The new Series G funding round is led by Durable Capital Partners LP and Fidelity Management & Research Company LLC. The investment also sees participation from funds advised by T. Rowe Price Associates, Inc., plus support from existing investors including Amazon, DST Global, bridgepoint and Greenoaks Capital.
Deliveroo aims to use the fresh capital to venture into new locations worldwide and focus on popular geographies such as France, Germany and Australia where the firm already has a foothold. With this extra funding, Deliveroo plans to increase its production and delivery efficiency for restaurants and riders using the platform.
More specifically, Deliveroo will use the $385 million of new funding to invest in:
- Expanding its “Editions” model, which offers kitchens exclusively operated by Deliveroo staff and fulfills orders placed through the app.
- Increasing their rider welfare standards with additional healthcare coverage options
- Further developing marketing campaigns that highlight exclusive food offers
- Technology advancements such as best-in-class restaurant management software
- Improved menus with personalized recommendations
- Automation of back office procedures
- Increased user protection measures such as improved order tracking functionality
The latest round of funding brings Deliveroo’s total amount raised to date over USD$2 billion with an estimated value of more than USD$7 billion, making it one of Europe’s most valuable privately held companies during this period.
Deliveroo recently raised $385 million in funding, opening up a new opportunity for the food delivery company to expand its reach globally. The company has been growing in popularity in Europe, with operations in 14 countries, but now the new funding will help them take its services to a wider international audience.
Let’s take a closer look at what Deliveroo hopes to accomplish with this fresh injection of capital:
Expansion plans in the US
Deliveroo has announced plans to further expand its operations into the US with the injection of $385m in funding from investors, including Amazon. Following successful expansion into Europe, Deliveroo intends to replicate its success and continue its mission to be the leader in food delivery.
To ensure that it is a market leader in the US, Deliveroo plans to bring on board local partners and invest in technology that will allow customers and restaurants easier access. The company also has plans to guarantee higher wages and better conditions for Deliveroo riders in the US. This includes giving them access to benefits such as free uniforms and insurance coverage while they are working on behalf of Deliveroo.
The expansion into this new market is set to provide further options for customers throughout the United States and fast, convenient and reliable food delivery services wherever you are currently located. This funding will also allow Deliveroo greater access into international markets which presents exciting opportunities for growth moving forward.
Expansion plans in Europe
Deliveroo plans to invest the $385 million in funding it recently received to extend its operations throughout Europe. This is a part of their strategy for significant global expansion. Deliveroo seeks to be an internationally recognized household name, offering comprehensive delivery services that cater to customers’ needs.
The investment will primarily be used in the following areas:
- Expansion into new markets in Europe
- Developing an array of innovative new food experiences, from recipe boxes and ready-to-eat meals
- Supporting local restaurants with new products and services
- Investment into technology, advertising, and marketing tools
- Continued expansion of Deliveroo’s rider fleet
As one of Europe’s leading tech companies, Deliveroo looks forward to supporting local restaurants, investing in innovative products, and providing quick delivery solutions that meet customers’ needs. By investing in its European network, Deliveroo is able to offer high quality service across multiple countries at once. In addition, this investment puts Deliveroo on track for a successful expansion throughout Europe and beyond.
Expansion plans in Asia
Deliveroo will use the new funding to grow its operations in Asia and worldwide. The company’s expansion plans in Asia include launching an online ordering app and a network of delivery hubs. This will allow customers to order and pay for their food via the app, which will be available for iOS and Android.
Deliveroo hopes that having delivery hubs across various major cities in Asia and its newly launched app will provide faster and more reliable delivery services to its customers in the region.
The company also plans on:
- Opening new offices
- Hiring additional staff
- Engaging with local partners to better understand customers’ preferences in Asia.
Furthermore, Deliveroo intends on increasing its marketing efforts across various countries to raise awareness about their services. This includes offering specialized discounts for first-time orders or loyalty programs for regular customers.
Deliveroo is confident that this expansion in Asia will help them reach more customers while increasing their penetration into existing markets such as Singapore, Malaysia and Taiwan, as well as establishing a presence elsewhere including Thailand, Indonesia and Vietnam. If successful, this strategy could allow Deliveroo to become one of the region’s leading online food delivery services.
Impact of Expansion
With the new influx of funding, Deliveroo can begin to expand its operations on a global scale and grow its customer base. This will bring many opportunities and create a new level of competition in the food delivery market.
Let’s take a deeper look at how Deliveroo’s expansion could impact the industry:
Impact on the food delivery market
Deliveroo’s newly acquired funding is set to greatly impact the food delivery market. The biggest UK-based online food ordering and delivery platform is in over 500 cities across fifteen countries. This marks a huge increase from the six countries they originally serviced.
This new expansion will make Deliveroo more competitive in its markets and put them in direct competition with other major players like UberEats, Just Eat and Glovo. It also means that food delivery options are available to more consumers worldwide, as well as increased coverage for restaurant owners looking for an effective way to reach customers at home or on the go.
The long-term effect of Deliveroo’s expansion efforts could also mean big changes in the overall industry landscape. Their wider reach could lead to:
- Greater economies of scale
- Improved efficiency
- Driving down prices on the whole
- Making it easier for businesses to save on operational costs without sacrificing quality of service or customer satisfaction.
Deliveroo’s additional funding provides them with a unique opportunity to solidify their position in key metropolitan areas while better positioning themselves against their established rivals – all of which should prove advantageous for consumers and business owners looking to take advantage of everything this new wave of digitalisation has to offer.
Impact on Deliveroo’s competitors
With Deliveroo’s new funding, the company is set to expand its operations globally. This puts the food delivery space at an even greater competitive disadvantage for its competitors as Deliveroo can expand into new markets and push for better economics for existing partners.
Deliveroo’s main competitors in Europe and North America are Just Eat Takeaway (JET), Grubhub, Uber Eats, Postmates and DoorDash. All will likely experience the impact of Deliveroo’s growth, as more customers in more countries will use Deliveroo when looking for food delivery services.
Additionally, Deliveroo’s expansion can also directly impact bottom lines category-wise depending on how much they are willing to spend to gain market share and how they price their services compared to their rivals. This could lead to increased price competition among food delivery providers, a challenge that JET has been facing in recent years with the rising pressure of local competition in various markets across Europe and North America. Meanwhile, successfully implemented cost-saving strategies may help mitigate overall cost pressure significantly for all players involved in this segment – especially when it comes to marketing and branding activities related to launching operations into new markets faster than their counterparts.
Overall, it remains uncertain whether Deliveo’s global expansion will allow them enough capital advantage over their current rivals or it will be quite a challenge that no one manages net profits within a few months or couple of years from now on.
Implications of Deliveroo’s expansion plans
Deliveroo’s $385 million funding will allow the company to expand globally and make it a formidable player in the food delivery market. Deliveroo focuses mainly on customers in Europe, but this injection of funds will allow them to increase their presence in the US and other countries.
The global expansion of Deliveroo may have far-reaching implications for the food delivery industry. With greater access to more customers, Deliveroo may gain economies of scale which could lead to higher efficiency and potential reduction of prices as they gain more market share. This could also mean more food options for customers globally and increased entry opportunities for new restaurants that wish to join the platform.
In addition, Deliveroo’s expansion could bring up new concerns involving labor regulations and pricing models across different regions. As a venture-backed company that prioritizes profitability and innovation over employee rights, this expansionist streak might lead regulators and consumer advocates in those regions to question its sustainability over time. It is up to regulatory bodies in countries where Deliveroo enters new markets to determine if their business practices are socially responsible due to lacking oversight on its part about labor conditions and wages for drivers.
With this new injection of funds, Deliveroo is well positioned for further growth on a global scale; however its implications can be diverse depending on each country’s market conditions. Therefore, business owners should consider the potential ramifications before utilizing such services by assessing its cost benefits against local wage regulations or labor laws that could impede them from doing so.
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