Deliveroo Takes $25 Million to Go

When it comes to investing in food-delivery startups, there’s still plenty to go around.

The latest such venture to receive an allotment is Roofoods Ltd.’s Deliveroo, which has scored $25 million in Series B funding.

The two-year-old, London-based startup also doesn’t act as an aggregator of existing food-delivery services or online ordering for pickup food. Instead, customers visit the Deliveroo site, type in their address when they want their food delivered and then choose from nearby restaurants. Once they order, the restaurant is notified via a tablet, which Deliveroo provides. When the food is ready, the restaurant dispatches a driver by tapping a button and the most appropriate delivery person completes the transaction. All deliveries are done on scooters and bicycles.

According to the company, the average delivery time from customer order to delivery is 32 minutes, with 24 of those minutes representing kitchen prep time. Deliveroo charges customers roughly $3.80 for each delivery and charges restaurants a percentage of the total order.

Since launching two years ago, Deliveroo has grown from three to 750 restaurants in London and now also serves Manchester and Brighton.

“We’ve gotten a lot of traction without much advertising spend,” said Deliveroo Chief Executive William Shu, who added that 80 percent of Deliveroo orders on any given day are from repeat customers.

The Series B round was led by Accel Partners, which was joined by existing investors Index Ventures and Hoxton. New investor Hummingbird Ventures also contributed.

Shu said he would use the funds to expand to other cities that are densely populated with people and restaurants and affluence. He expects Deliveroo will be in 15 cities in Europe and the Middle East by the end of the year.

Along with scaling operations, Deliveroo will focus on improving algorithms to reduce delivery times and help delivery contractors improve their service and speed.