Deliver…ooh! Food delivery, a war without boundaries

27 May 2019

In 2017, the food delivery market accounted for $82b with a CAGR of 9,8% between 2018-2026, according to ResearchandMarkets.com

The Italian restaurants, has a potential of over 10 million clients and accounts for 11% of all delivered food.

Amazon enters in Deliveroo

Heads were turned as Amazon became Deliveroo’s main investor transacting $575 million.

This is not Amazon’s first time at the rodeo; in 2015 it introduced its own delivery operations called “Amazon Restaurants” in the USA and UK. However, the operations were short lived due to the fierce competition from Uber Eats and Deliveroo.

According to internal sources, Deliveroo has received $1.53b in funding. Yet, the year 2017 was ended with a revenue of $277 million and a loss of $189 million; the CEO and founder Will Shu has remarked the urgent need of returning to profitable operations.

Created in 2013, Deliveroo now has 2500 employees, 60 thousand riders and operates in 13 markets worldwide, including its birthplace in the UK. The English company significantly increased its presence in Italy this year, going from 34 cities in January to 75 in April.

Despite starting as a third party between restaurant and customer (currently working with 80,000 clients), Deliveroo opened its own kitchens to gain greater control over processes.

Consolidating the sector

Once news about Amazon’s investment went public, shockwaves were sent across the financial market with Just Eat losing 8.3% of its shares, Takeaway.com 4,6% and Delivery Hero 2.3%.

This has caused a new war in the food delivery market. Last December, the Dutch company Takeaway.com took over the German group Delivery Hero (comprised of Foodora, Lieferheld, Pizza.de) for €680m; though, despite being active in 12 European countries, it does not have any presence in Italy. The Italian market was also abandoned by Foodora, which was bought by Glovo in 2018.

In a time span of two years, the American company DoorDash received $1.4b in funding and is now valued at $7b. It is also important to note DoorDash’s close partnership with Walmart.

Uber Eats, which previously attempted to purchase Deliveroo, may be Amazon’s next biggest target.