The online food delivery business has been on a rise ever since the outbreak of COVID-19 pandemic in March last year. Amidst this surge, various food delivery companies are striving to secure a position in the industry space. One such company, Deliveroo, has recently made it big in the business sphere with its shares rising as much as 10% to 360p following the announcement of Delivery Hero taking up 5% stake in the firm.
Reports suggest that the move comes at the time of alliance in the online food delivery industry, as various companies push in for a spot in new sectors like groceries and look forward to capitalizing on the growth boost given the lockdown imposed by lockdowns.
Speaking on the latest move, Niklas Ostberg, Chief Executive of Delivery Hero cited that the company began building its stake in the Deliveroo since April after considering all possible scenarios. He further added that the firm is ecstatic to have connected with Deliveroo Founder Will Shu and his team.
Berlin-based Delivery Hero was established in 2011 and has been listed on the Frankfurt stock exchange since 2017, where it currently has a market valuation of almost 33 billion euros, relatively four times higher than that of Deliveroo. For the record, the company is active in more than 50 economies across Europe, South and central America, the Middle East and Asia.
It has, however, been claimed that both the companies, Deliveroo and Delivery Hero, do not overlap the former’s largest market, post the latter struck a deal in 2016 to trade its UK operations, Hungryhouse, to Just Eat for about 200 million pounds. Furthermore, the firms are set to update investors on current trading starting this week.
Moving further, Deliveroo declined to comment on the recent accomplishment.