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Friday 18 October 2019

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Amazon invests in Deliveroo

Written by Hannah McGrath
17/05/2019

Amazon has made a significant investment in Deliveroo, as part of a £450 million fundraising round for the food delivery app.

The e-commerce giant’s investment, for an undisclosed sum, brings the total funding for the food ordering and delivery network to $1.5 billion since it launched in 2013.

The latest round also included backing from existing investors T. Rowe Price, Fidelity Management and Research Company, and Greenoaks.

Deliveroo said it would use the money to continue expansion into markets around the world, in addition to taking on more staff at its London engineering hub and focussing on food technology innovations such as delivery-only ‘super kitchens’ and different formats for restaurants.

Doug Gurr, Amazon UK’s country manager, said that Deliveroo’s founder and chief executive Will Shu and his team had built “an innovative technology and service”.

Shu said: “This new investment will help Deliveroo to grow and to offer customers even more choice, tailored to their personal tastes, offer restaurants greater opportunities to grow and expand their businesses, and to create more flexible, well-paid work for riders.”

Both Amazon and ride hailing service Uber have previously been reported to have considered bids to buy Deliveroo outright. Amazon launched a brief venture in the UK food delivery market called ‘Restaurants’ in 2016, but wound it down last year after losing out to competitors including Deliveroo and rivals Just Eat and Uber Eats.

Responding to the move, Catherine Shuttleworth, retail analyst and chief executive at Savvy, said it represented a “really significant step” in the UK food market.

She said: “We know from our stats that 42 per cent of UK shoppers have used an app to order from a food delivery service (such as Just Eat, Deliveroo or Uber Eats).”

However, she added: “In large part geographic coverage is their main current obstacle to penetration growth and Amazon could offer immediate scale. In perspective, 16 per cent of shoppers have used Amazon Prime Now (1-2 hour delivery service) though not necessarily for food.”


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