Merchant Innovation

Delivery Hero Grabs $110M In Funding And A $3.1B Valuation Pre-IPO

Berlin-based take-out service Delivery Hero has snapped up what could be its last funding round as it heads toward an IPO sometime after this year. The latest round clocks in at $110 million and comes via two unknown sources who are “leading public market investors” out of the U.S. The latest round brings the startup’s valuation to $3.1 billion, the company announced.

“We are delighted to further strengthen our investor base with two first-rate public market funds sharing our long-term vision of transforming the online food ordering industry,” said Niklas Östberg, CEO of Delivery Hero, in the release.

All in all, Delivery Hero has captured approximately $600 million in equity funding this year alone. Prior investors include Insight Venture Partners, General Atlantic, and Rocket Internet (the sole investor behind the $586 million raised so far this year; Rocket also took a $58 million secondary investment), as well as several US-based public fund managers.

The when of Delivery Hero is still up in the air – Östberg believes that the firm could be in a position to list this year – with 200,000 restaurants connected by the service in 34 countries. But going public has costs – particularly to speed of operations.

“We will not be able to share investors and also not when we will IPO. Our view is that we will be prepared later this year but will wait until we see a clear benefit from it,” he told TechCrunch. “Right now we enjoy the benefits of being private. We have the same financial backing as our public peers while being able to act very long term. This makes us the worst possible competitor you can have. Therefore no plans to IPO in 2015.”

As for additional funding rounds?

“I actually don’t know if we will raise before [our IPO],” he said. “We will only take on capital if we see a need for it.”

The latest rounds will go toward funding “selective acquisitions and intensive product innovation,” the company notes in its statement.

That could mean a couple of different things. The firm could expand its geographic reach – particularly to the U.S., where it is notably absent (likely due to the steep competition of startups like GrubHub as well as big players like Amazon that are moving into take-out delivery.)

Delivery Hero could also look to expand into new new product areas.

“We are a product leader today but plan to make a step change by the end of the year,” Östberg noted. “We will stay focused on food.”

Focus on food, however, is a broad area interest and could also describe meal kit delivery – a la Blue Apron – or grocery delivery – a la every firm in Silicon Valley right now.

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