Rocket Internet is trying to jolt up the world of online food delivery. The German startup factory is selling Foodpanda to Delivery Hero. For those who don’t know but, Delivery Hero is a big rival of Foodpanda. Rocket Internet holds stakes in both businesses. This move will add more value to Delivery Hero in the long run that aims an IPO of its own in the future. The terms of the acquisition deal have not been disclosed to the public.
The FoodPanda acquisition is being funded through the issuance of new shares in Delivery Hero to the existing shareholders of Foodpanda. By this, Rocket Internet increases its ownership in the company to 37.7 percent. The move of new shares gives it a fully diluted basis post transaction. The transaction might close prior December 31st, 2016 and is under subjection to customary closing conditions. Delivery Hero is competing against services such as Just Eat along with new players in the market like Uber Eats, Amazon and Deliveroo. The company holds value of $3.1 billion, in recent estimates. The acquisition move will strengthen its position in the globe in online food delivery services. Along with FoodPanda it will now process over 20 million orders per month across 47 countries.
By acquiring FoodPanda there will be an addition of 20 new countries in Eastern Europe, MENA and Asia to the Delivery Hero’s platform. It claims to be the market leader in 17 countries while it operates in 22 countries total generating 2 million monthly orders. Delivery Hero acquiring FoodPanda will consolidate its market position in the Middle East, strongly.
Read about whether you should dabble in the online food industry?
Looking at the history of the two companies Delivery Hero and Foodpanda are in Berlin. They started out as rivals in the online food market but over the years have made amends in their relationship. This is because of the fact that Rocket Internet has stakes in both which brought them together.
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