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Amazon Invests In British Food App Deliveroo, Rivals Uber Eats


05/17/2019


Amazon Invests In British Food App Deliveroo, Rivals Uber Eats
Amazon is taking on Uber east globally through leading a $575 million fundraising and taking up a stake in the British online food delivery company Deliveroo as the race for gaining a dominant position in the market for takeaway meals heats up.
 
There were ripples through the sector over the news of one of Europe's fastest growing tech companies being targeted as an investment destination. The share of European rivals Just Eat, Takeaway.com and Delivery Hero were hit by the news.
 
Analysts believe that as the diversification from fast, unhealthy meals to nutritious dishes occurs in the takeaway market, it will expand further. Analysts also say that the online giants feel that they have a much better scale of operations to easily take on the smaller rivals which have to forgo profits to achieve growth and expansion.
 
The fund raising round would help Deliveroo to invest in pursue innovations such as expanding its own kitchens which restaurants can rent to meet demand, technology development and increase of reach, said the founder and CEO of the loss making venture Will Shu.
 
Without giving much details, Deliveroo said that the new Series G funding round was led by Amazon. Wihtthe latest round of fundraising, the a total of $1.53 billion has so far been raised by Deliveroo. T. Rowe Price, Fidelity Management and Research Co, and Greenoaks are among its other investors.
 
"Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organization," Shu said.
 
The London headquartered Deliveroo is active in 14 countries including France, Germany, Hong Kong, Singapore and Kuwait and makes use of 60,000 riders to deliver meals from more than 80,000 restaurants and takeaway outlets.
 
The company makes use of its "Frank" algorithm to link best restaurants and riders with the customer on the basis of their location.
 
In North America, South America, Europe, Asia and Africa, Deliveroo competes with Uber Eats. The company also rivals the likes of the loss-making Takeaway.com platform that operates in 10 European countries and Israel. Germany's Delivery Hero is also a rival of Deliveroo. The company hopes to break even in Europe in the second half of this year where it operates in over 40 markets and works with more than 290,000 restaurant partners.
 
A costly struggle for supremacy in Germany was recently settled between Takeaway.com and Delivery Hero which underscores the fight underway in each market. The deal resulted in a 1 billion euros ($1.1 billion) acquisition of Delivery Hero by its smaller business rival Takeaway.
 
Uber Eats and the online platform Just Eat are the main competitors of Deliveroo in the UK.
 
The business model of Just Eat is linking customers with local takeaway restaurants that have their own delivery service and the company had seen rapid growth since it was founded in 2001 by five Danish entrepreneurs.
 
"We're impressed with Deliveroo's approach, and their dedication to providing customers with an ever increasing selection of great restaurants along with convenient delivery options," said Doug Gurr, Amazon UK country manager.
 
"Will and his team have built an innovative technology and service, and we're excited to see what they do next."
 
(Source:www.moneycontrol.com)