The online food delivery business is, as Delivery Hero co-CEO Fabian Siegel said earlier this month, a land-grab. Siegel’s company and arch-rival Just-Eat are both trying to extend as quickly as possible into any market that isn’t the U.S., and that’s the kind of activity that requires regular top-ups.
Fortunately for Siegel, Berlin-based Delivery Hero has just scored a big one: a €40m ($ 49m) round that doubles the total capital it’s raised so far.
“It’s going to bring us profitability,” Siegel told me. “Right now we’re aggressively investing into our user-base. There may be one or two acquisitions.”
Organic growth is always ideally part of the plan in this game, but, given the need for speed, so is buying up smaller players. Just-Eat last bought someone in April, when the UK’s Fillmybelly.com became the company’s ninth acquisition since the start of 2011.
Delivery Hero’s last buy was that of Finland’s Pizza-online.fi back in late May. A couple of months before that it revealed both a €25m round and the purchase of the OnlinePizza Norden Group, which provided a strong foothold in Sweden, Finland, Austria and Poland.
So, before we take into account further acquisitions, where do the two rivals stand now?
London-based Just-Eat operates in 14 countries and said in May that it was partnering with 25,000 restaurants. Delivery Hero is a bit behind, with 12 countries and 22,000 partners under its belt.
But consider this: although it’s undeniably stepped up both its funding and acquisition game in the last two years, Just-Eat has been going for over a decade. Delivery Hero only came out of Team Europe’s stable in late 2010.
Siegel chalks the rapid growth up to Delivery Hero being “scrappy” and – crucially – not looking to float anytime soon.
“We’re very opportunistic compared to Just-Eat who want to go IPO – if you’re on the IPO track you have to be slower,” he suggested.
The latest wedge of cash to support this opportunism comes from Kreos Capital – which Seigel said would be able to provide “additional support for future growth” – and existing investors such as Kite Ventures.
“Since our first investment in Delivery Hero we have been impressed with the performance of the Delivery Hero team,” Kite’s Edward Shenderovich said in a statement. “The company has been growing rapidly into various markets. Now we [are] able to significantly increase our investment into Delivery Hero and provide sufficient capital to support this growth.”
UPDATE: This story originally said Delivery Hero was active in 11 countries and had 21,000 restaurants as partners. The company has now noted the addition of China to its roster in July, and says it has upped its partner base to 22,000.