Deliveroo have announced that Amazon is leading a new $575 million funding round, alongside existing investors taking the total Deliveroo have raised to date to $1.53 billion.
This is an interesting move considering that Amazon shut down Amazon Restaurants last year, they only launched in the UK back in 2016 so had a short two year life.
Amazon aren’t one for giving up just because they hit a failure however and buying into Deliveroo gives them a base to build from again. They’ll doubtlessly be looking at the metrics – Amazon love data – and it would be no surprise if they acquired the entire business at some point in the future.
Deliveroo isn’t the biggest food delivery business out there however and is largely confined to large cities. Just Eat, a competitor, is three or four times the size and has much greater penetration in rural towns and villages.
Just Eat tend to work with just about any food outlet going however, whilst Deliveroo tend to operate at the higher quality end of the food delivery business. That fits well with Amazon’s Whole Foods business which is also high end and aimed at buyers at the trendy end of the market.
What could be interesting is if Amazon start to use Deliveroo for Prime Now two hour deliveries in cities. Deliveroo are also opening ‘dark’ kitchens – restaurants with no customers focussing purely on food for delivery. These two could potentially double up as mini Amazon warehouses for stock to arrive and be delivered by Deliveroo.
“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. Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organisation. This is great news for the tech and restaurant sectors, and it will help to create jobs in all of the countries in which we operate.”
– Will Shu, founder and CEO, Deliveroo
With this funding, Deliveroo say that they will continue to build its world-class service—bringing customers the food they want whenever and wherever they want it, offering even more work for riders, and helping restaurants to grow their businesses by reaching new customers. The new investment will contribute to:
- Growing Deliveroo’s engineering team based in its London headquarters, creating more high-skilled jobs and building on London’s growing reputation as a tech hub.
- Expanding Deliveroo’s delivery reach in order to continue offering its service to new customers.
- New innovations in the food sector, for example through delivery-only super kitchens “Editions”, as well as new formats that will help restaurants expand to new areas at a lower cost and lower risk, bringing more choice to local neighbourhoods.
- Development of new products for customers to offer a more personalised experience, increased support for restaurant partners, and new tools to offer riders flexible and well-paid work.
“We’re impressed with Deliveroo’s approach, and their dedication to providing customers with an ever increasing selection of great restaurants along with convenient delivery options. Will and his team have built an innovative technology and service, and we’re excited to see what they do next.”
– Doug Gurr, Country manager, Amazon UK
As well as the UK, Deliveroo operates in over 500 towns and cities across 14 markets, including Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, Taiwan, United Arab Emirates and Kuwait. The new investment will be completed in the coming months, subject to customary regulatory approvals.
