Another global acquisition gives a little insight into the complicated world of international food delivery companies as Berlin-based Delivery Hero announced it was buying additional shares in Glovo, which is headquartered in Barcelona.
Delivery Hero is set to acquire a 39.4 percent stake in the company, on top of the 44 percent it already had. Niklas Östberg, founder and CEO of Delivery Hero, said the deal is the next step in a long relationship.
“The Delivery Hero team has admired and supported Glovo for many years. They have been frontrunners in the industry by offering a multi-vertical service from the start. Their product focus and fast execution have given them a leading position in 16 out of 25 markets, despite having launched a number of years later than their peers,” said Östberg
Glovo operates in 25 countries mostly in Southern Europe but has markets across Europe, the Middle East and Africa. Glovo founder and CEO Oscar Pierre said it’s a perfect match.
“With the markets we cover today, we can serve a total population of more than 700 million people. I believe our potential is untapped, and I’m happy to have found a partner that matches our ambition, culture and will keep supporting this adventure,” said Pierre.
Delivey Hero committed to continual investment in Glovo, and both founders and the leadership team will remain in place to operate continue operating the company. The core of the new partnership will be leveraging shared technology, improving efficiencies and accelerating product development, according to the companies.
It looks like a pretty standard investment, but it offers a glimpse into the messy world of global delivery that U.S.-based companies only recently starting to compete in. Glovo actually acquired several Delivery Hero markets for more than $200 million in May of 2021 as it sought to focus on market capabilities and profitability. Clearly, it made sense to consolidate further.
The new deal brings those markets back into the Delivery Hero fold. In all, Glovo brings operations in 1,300 cities across 25 countries, 70,000 monthly active couriers and 130,000 monthly active partners. The company grew gross order volume to $3 billion last year as it expanded by 80 percent. That’s on top of Delivery Hero’s 9.6 billion in gross volume through the third quarter of 2021.
Both companies have been embracing the ultra-fast mindset and have been rolling out micro-fulfillment centers across the world to make 15-minute deliveries possible. Delivery Hero credits that push as a key factor in the “unprecedented” 64-percent order growth rate last year.
The companies will release more substantial information in coming weeks, but it’s safe to say the delivery space will see plenty of consolidation through 2022.