Food delivery companies are riding a wave of growth from consumers ordering from home during the COVID-19 pandemic, but the sector remains marked by harsh competition and a fight to secure greater market share. Looking forward, the global online food industry is predicted to grow and reach $154.34 billion (approx £113.7 billion) in 2023 at a CAGR of 11.51%.
As the battle for food delivery dominance in Europe is heating up, Delivery Hero, Berlin-based leading online food delivery company, continues to focus on expanding business with several strategic investments and acquisitions.
Raised £1.12 billion
In a recent move, the big food tech raised a whopping €1.25 billion (approx £1.12 billion) by 9.44 million new shares to institutional investors, increasing its current share capital by around 4.7%.
According to Reuters, the placement price of €132 (approx £119) per share represented a 4.6% discount to the stock’s closing price of €138.35 (approx £124.95). Also, the shares of Delivery Hero reached an all-time high on Tuesday as well.
It’s worth mentioning that German food delivery joined DAX (Deutscher Aktienindex), the leading stock market index in Germany, consisting of the 30 largest companies by market capitalisation and trading volume, listed on the Frankfurt stock exchange.
On the other hand, the food delivery company announced the acquisition of South Korea’s largest food delivery platform Woowa Brothers in December 2019. Recently, Delivery Hero got approval for its $4 billion (approx £2.94 billion) takeover deal as well. Delivery Hero expects to receive the final written approval and closing to occur in the first quarter of 2021.
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But, there is a catch
However, there is a catch here! According to the Korea Fair Trade Commission (“KFTC”), the approval comes under the condition of the divestiture of Delivery Hero’s South-Korean subsidiary Delivery Hero Korea LLC (including “Yogiyo”). The timeframe given for the divestment is six months from the date of which Delivery Hero will receive the written decision. Delivery Hero will be allowed to request an extension of the sale period for up to six months under certain circumstances.
Niklas Östberg, CEO and Co-Founder of Delivery Hero, said: “The approval of our partnership with Woowa is great news for both our companies and the broader delivery industry. We are deeply saddened by the required condition to divest Delivery Hero’s subsidiary Delivery Hero Korea in South Korea. We wish Delivery Hero Korea the best for the future, and will work hard to ensure that this transition is as smooth as possible for all impacted employees.”
Niklas Östberg, co-founder and CEO of Delivery Hero, who has built one of this largest supply groups in the world is ambitious, hungry for success, and is one of the most coveted CEOs in Germany. In this article, we take a quick glimpse at five important business lessons we can learn from Niklas Östberg.
1) Believes in entrepreneurial organisations
Any business is a reflection of the entrepreneur’s values and beliefs. Pretty much everything will work in an organisation when the people, right from top management to low-level staff believe in what the business is doing.
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“I think that people can be the best version of themselves when you leave them their freedom. As soon as you start giving too many directions or restrictions, people lose their creativity and passion. We want to support the local brands that we acquire to grow even further and become part of a network of entrepreneurs that is bigger than the sum of its parts,” says Östberg.
2) Remain calm even in stressful situations
For those who hold crucial positions including a team captain to CEO to pilot, the ability to stay calm during a plight can mean the difference between success and failure.
“It is essential for me to take the time to quietly analyse situations and think things through before forming an opinion and making decisions.”
3) Empower your employees
Happy employees = Happy customers = successful company. In an organisation, the feeling of trust and importance leads to better productive work always.
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“When I trust people, I give them a lot of freedom and autonomy and try not to stand in their way. We have worked on building an organisation in which there are as little bottlenecks as possible. This means that there are only a few decisions that come directly from above. Instead, we empower our employees to launch their own initiatives and execute their strategies, because only then can we make everyone feel part of our success and growth journey.”
4) Create a seamless experience
Customer experience can make or break a company. For a service organisation, customers are the king and expect to be treated accordingly. Since the customers are more empowered, the majority of them demand personalised interaction with brands regardless of platform (online/offline).
“When it comes to my vision, I want our customers to love using our services and that our offer is experienced seamlessly. But it does not stop with the customer. My goal is also to build a company that I and others enjoy working at. People should want to be a part of Delivery Hero. At the end of the day, I want my children and the next generation to look back at what we have accomplished with a sense of pride and go “Wow, my dad helped to build that company.”
5) Remember to be young, dynamic, diverse
At present, the global market is more dynamic and diverse than before. To remain relevant and competitive, it is important to re-evaluate, update various aspects of operations.
“Most of the companies in the DAX are very established, much older, and usually rather traditional when it comes to their organisation and processes. In that sense, I am convinced that we are bringing a breath of fresh air to the DAX. We are a young, dynamic, diverse, and extremely international company,” concludes Östberg.
Founded in Berlin in 2011, Delivery Hero is a worldwide network of online food ordering sites, operating in 50 countries across Asia, Europe, Latin America, the Middle East, and North Africa. Valued at €24.5 billion (approx £22 billion), the company has raised $6.6 billion (approx £4.8 billion) in funding to date.
Additionally, Delivery Hero is pioneering quick commerce, the next generation of e-commerce, aiming to bring groceries and household goods to customers in under 20 minutes. Headquartered in Berlin, Germany, the company has more than 27,000 employees.