On Tuesday, DoorDash announced its agreement to acquire U.K. competitor Deliveroo for approximately £2.9 billion (around $3.29 billion) as the U.S. food delivery company aims to expand into new markets.
According to the companies, DoorDash will offer Deliveroo shareholders 180 pence per share, a 44% premium over Deliveroo’s share price as of April 4, when DoorDash approached with its acquisition proposal.
This acquisition will provide DoorDash with access to nine new European markets where Deliveroo primarily operates. The companies anticipate that their combined scale will enhance their competitive positioning against rivals such as Just Eat Takeaway and Uber Eats.
Once the acquisition is finalized, DoorDash is expected to operate in 40 countries, serving a total of 50 million monthly active users.
Deliveroo, founded in 2013, went public in 2021 amid strong performance in the grocery and food delivery sector, spurred by post-pandemic conditions where people were staying home and working remotely, leading to increased demand for takeout. Numerous startups emerged in this space, attracting significant venture capital investment.
However, as COVID-19 concerns receded and consumers returned to in-person shopping and dining, delivery companies faced challenges in adapting to quickly shifting consumer behaviors in an increasingly saturated market. The situation was exacerbated by a decrease in available capital in 2022 due to rising interest rates and a shift towards more profitable investments by venture capitalists.
Deliveroo’s shares had dropped by more than 50% since its listing until April 4. In March, the company sold its Hong Kong business to Delivery Hero due to intense competition and had exited Australia in 2022 for similar reasons.
In the fiscal year ending December 2024, Deliveroo reported revenue of approximately £2 billion and a gross transaction value of £7.1 billion.
