Posted on Tuesday, Sep 1st 2015
Recent market reports peg the global food ordering market to be worth $70 billion with nearly $9 billion of it being conducted online. A report by Cowen and Company suggests that the online food ordering market will be more than the offline food ordering market by the year 2020. Billion Dollar Unicorn club member Delivery Hero is growing rapidly in the online food ordering segment.
Delivery Hero’s Offerings
Berlin, Germany-based Delivery Hero was founded by Niklas Östberg, Markus Fuhrmann, Lukasz Gadowski, and Kolja Hebenstreit in 2011 to set up a global food delivery platform. Since inception, they have been focused on transforming the way food is ordered online. Their platform has made it simpler for customers to visit their restaurants online and order food from the site. Customers are able to search for the restaurants using multiple filters such as zip codes, cuisine, distance, payment options, and customer reviews, browse the menu for restaurants that they select, share and access feedback about the food, and even pay for the food online.
Delivery Hero has expanded significantly since its inception. Today, they have partnered with more than 200,000 restaurants in over 34 markets globally. They allow these restaurants to access their platform and, in return, earn a commission on the orders placed through their platform. Latest reports suggest that the company helps process about 10 million orders each month.
They continue to grow their international operations through acquisitions. Last quarter, they announced a $589 million acquisition of Turkey’s Yemeksepeti, making it the biggest acquisition ever made in the online food ordering market. At the time of the acquisition, 15-year-old Yemeksepeti was a popular brand in Turkey, processing more than 3 million orders each month across its markets, which include United Arab Emirates, Saudi Arabia, Lebanon, Oman, Qatar, and Jordan. The acquisition will help Delivery Hero establish presence in Turkey and strengthen their presence in other Middle Eastern markets. Earlier this year, they had acquired Talabat.com to enter the Middle Eastern markets.
Delivery Hero also announced the acquisition of Greek’s market leader e-Food.gr for an undisclosed sum. e-Food.gr helps process more than 300,000 orders per month across 40 cities in Greece.
They are also expanding into the luxury food segment and recently released Urban Taste, a service that allows customers to order takeaway service from premium restaurants. The service is currently being released in Germany.
Delivery Hero’s Financials
Delivery Hero does not disclose their financials, but recent market reports suggest that for the first quarter this year, they processed over €250 million (~$280 million) of restaurant orders, translating to €30 million ( ~$33 million) in net revenues.
They have been venture funded so far with $1.4 billion in investment from investors including Rocket Internet, Texas Atlantic Capital, Insight Venture Partners, Kite Ventures, Vostok New Ventures Ltd, Luxor Capital Group, German Startups Group, Target Ventures, Phenomen Ventures, HV Holtzbrinck Ventures, Kreos Capital, Point Nine Capital, Ru-net, Team Europe, and Tengelmann Ventures. Their last round of funding was held in June this year when they secured $110 million in a private equity round from undisclosed investors. The funding is said to have valued them at over $3.1 billion. They plan to use the latest funds toward funding acquisitions and expanding their offerings. Delivery Hero is also evaluating the option of diversifying into options such as DIY home cooking kits like those offered by Blue Apron.
For now, Delivery Hero wants to remain privately held and will only decide on going public by next year.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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