Delivery Hero: on a journey of building the world’s leading delivery giant
Since 2011 Delivery Hero has been growing from food delivery service in Germany to the q-commerce delivery giant operating in more than 40 markets worldwide. AIN.TECH tells the story about the journey of one of the leading global online ordering and delivery marketplaces.
The Delivery Hero network originates from Lieferheld, which was founded by the Berlin-based incubator Team Europe in 2010 and launched in Berlin and Hamburg. It was a food delivery service that enabled its visitors to order food and pay directly online. Orders placed through the service are then forwarded to participating restaurants that in turn fulfil these orders. The launch of the service became possible thanks to €1 million investment from Holtzbrinck Ventures.
Next year Team Europe announced the international expansion of the online food ordering business with the founding of Delivery Hero Holding, because of the surprising success of incubator’s first project Lieferheld in Germany. Led by Swedish entrepreneur Niklas Östberg as the CEO, who has previously set up online food ordering platforms in Finland, Austria, Poland and Sweden, Delivery Hero started to grow rapidly driving an aggressive international expansion, mostly through mergers and acquisitions.
Already in two years, Delivery Hero created online food ordering platforms in Mexico, Australia, Russia, Finland, Switzerland, Austria, Poland, Sweden and the UK. At that time the company raised €80 million in venture funding from international investors including Moscow-based ru-Net and Kite Ventures, German Point Nine Capital, Tengelmann E-Commerce, the UK Kreos CapitalVC funds and others. In 2012 the annual marketplace revenue of Delivery Hero network raised to over €250 million, making it one of the fastest-growing internet marketplaces globally.
Thus, Delivery Hero has entered Indian, South Korean, Greek, and Turkish markets by acquiring its delivery players until 2016. The largest deal in this business sector was closed after the company bought the Turkish competitor Yemeksepeti for $589 million. And after Delivery Hero bought Berlin-based online food delivery marketplace of German incubator and investor Rocket Internet Foodpanda in December 2016, its valuation increased to $3.1 billion. The new purchase added 20 new countries in Eastern Europe, the Middle East and Asia to the company’s platform.
On June 30, 2017, Delivery Hero went public on the Frankfurt Stock Exchange and was valued at $5 billion. The company earned around €1 billion from the IPO, which it plans to use to repay loans and invest in growth. As reported by TechCrunch, Delivery Hero was not profitable at that time. Despite its total revenue for 2016 did rise 71% year-on-year to reach €347 million – thanks to its acquisition of FoodPanda mainly, it had a total loss of €202 million. But that did not stop the global South African internet group Naspers from buying 23.6% of Delivery Hero’s stakes for €660 million.
To date, Delivery Hero is the world’s leading delivery platform, operating its service in 43 countries across Asia, Europe, Latin America, the Middle East, and North Africa and processing over 120 million orders on average per month. Currently, the company is focusing on expanding its offering, including quick commerce or q-commerce, the next generation of e-commerce, bringing not only food but also groceries and household products to customers in under 60 minutes, which is now available on 41 markets. And it does not plan to stop.
“Delivery Hero continues to focus on expanding our business with several strategic investments, like our entry into Japan and the acquisitions of InstaShop in MENA and Glovo’s business in Latin America. We are proud of the incredible growth trajectory that Delivery Hero is on and look forward to continuing to always deliver an amazing experience,” Östberg emphasized.