Deliveroo, a London-based online food delivery platform, has raised $180 million (approx £132 million) in the latest funding round, valuing the company at over $7 billion (approx £5.1 billion). To date, the company has raised around €1.5 billion (approx £1.3 billion).
The funding round was led by existing shareholders Durable Capital Partners LP and Fidelity Management & Research Company LLC.
The Series H investment comes as the UK company eyes a potential listing this year, which is expected around April.
How will the funding be used?
The company will use the funding to invest further in its business, including expanding its on-demand grocery service, Plus subscription service, and “Editions” delivery-only concept.
Backed by Amazon, the food delivery company is also planning to offer its signature service to restaurants, enabling customers to order delivery via restaurants’ websites and increasing restaurants’ sales
Will Shu, founder, and CEO of Deliveroo said: “At Deliveroo we are always focused on developing the best proposition for consumers, riders, and restaurants. This investment will help us to continue to innovate, developing new tech tools to support restaurants, to provide riders with more work, and to extend choice for customers, bringing them the food they love from more restaurants than ever before. We are pleased our shareholders see the opportunity and growth potential ahead of us.”
Henry Ellenbogen, Managing Partner and Chief Investment Officer at Durable Capital Partners LP, said: “I have been impressed with the team’s ability to spot opportunities, innovate and adapt to changes in the market. The online food delivery market is nascent and underpenetrated. We believe Deliveroo has the potential to become a much bigger company over time.”
Supported restaurants, consumers, and riders
Deliveroo has supported the three sides of its marketplace throughout the pandemic. The company invested to support local restaurants through targeted marketing campaigns, reducing onboarding fees, increasing the speed of payments, developing new services such as Table Service, as well as charging 0% commission on Pick Up orders.
For consumers, Deliveroo invested in expanding its selection and prioritised safe delivery services. Riders received support in the form of free PPE, amongst other measures.
Deliveroo has been supporting the NHS throughout the pandemic, delivering hundreds of thousands of free meals.
2020: Year of growth
Last year, the company said that it has been profitable for over 6 months at the operating level in 2020. The company is profitable in 11 of 12 markets and has continued to see improved unit economics in 2020. As per the company claims, Deliveroo has seen increased engagement from customers amid pandemic.
In 2021, Deliveroo expects to expand into around 100 new towns and cities across all four nations of the UK.