Deliveroo, the UK-based food delivery company, has raised $180 million in a funding round led by Durable Capital Partners, a US-based investment firm. The funding round also included participation from Fidelity Management & Research Company, and existing investors T. Rowe Price, General Catalyst, and Index Ventures. The latest funding round brings Deliveroo’s valuation to $7 billion.
The Growth of Deliveroo
Deliveroo was founded in 2013 by Will Shu and Greg Orlowski in London. The company has since expanded to over 200 cities across 12 countries, including Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, United Arab Emirates, and the United Kingdom. Deliveroo partners with over 140,000 restaurants and employs over 100,000 riders to deliver food to customers.
The company has seen significant growth in recent years due to the increasing demand for food delivery services. The COVID-19 pandemic has also accelerated this trend as more people are staying at home and ordering food online. In 2020, Deliveroo reported a 64% increase in orders and a 54% increase in gross transaction value compared to the previous year.
The Importance of the Funding Round
The latest funding round is crucial for Deliveroo as it prepares to go public later this year. The company plans to use the funds to invest in its technology platform, expand its delivery network, and enhance its restaurant partnerships. Deliveroo also plans to launch new services such as on-demand grocery delivery and subscription-based services.
The funding round also demonstrates the confidence that investors have in Deliveroo’s business model and growth potential. Durable Capital Partners’ investment is particularly significant as it is led by Henry Ellenbogen, a former portfolio manager at T. Rowe Price who was an early investor in companies such as Amazon and Netflix. Ellenbogen’s involvement in the funding round suggests that Deliveroo has the potential to become a major player in the food delivery market.
The Competitive Landscape
Deliveroo operates in a highly competitive market, with other major players such as Uber Eats, Just Eat, and Grubhub. However, Deliveroo differentiates itself by offering a premium service that focuses on high-quality food and restaurant partnerships. The company also invests heavily in its technology platform to improve the customer experience and increase efficiency.
The COVID-19 pandemic has also created new opportunities for Deliveroo as more restaurants have started offering delivery services to stay afloat. Deliveroo has been quick to capitalize on this trend by partnering with new restaurants and expanding its delivery network.
The Future of Deliveroo
Deliveroo’s latest funding round and upcoming IPO indicate that the company has ambitious plans for growth. The company’s focus on technology and premium service has helped it stand out in a crowded market, and its expansion into new services such as grocery delivery could further increase its market share.
However, Deliveroo will face challenges in the future, such as regulatory scrutiny over the treatment of its riders and the increasing competition from other food delivery companies. The company will need to continue to innovate and adapt to stay ahead of its competitors.
Deliveroo’s latest funding round is a significant milestone for the company as it prepares to go public later this year. The funding will help Deliveroo invest in its technology platform, expand its delivery network, and launch new services. The involvement of Durable Capital Partners, led by Henry Ellenbogen, demonstrates the confidence that investors have in Deliveroo’s business model and growth potential. However, Deliveroo will need to continue to innovate and adapt to stay ahead of its competitors in the highly competitive food delivery market.