German startup investment company Rocket Internet has added to its galaxy of food delivery partners by investing a 30-percent stake in take-out aggregator Delivery Hero, worth 496 million euros, Bloomberg reports. The investment means that the Berlin-based food company is now valued at over $2 billion as a result of the investment.
Rocket Internet has been largely a startup investor that focuses on building the companies from the ground up rather than investing in existing ones, until this point. Most of its businesses include cloning businesses “from Groupon to AirBnB” and marketing them as competitors. Last year, the investment company launched an IPO in Germany and raised 1.4 billion euros, making founding brothers Marc, Oliver and Alexander Samwer into billionaires overnight. More importantly though, the company had a new source of funding to delve deeper into e-retail, namely food delivery companies.
The 30 percent stake in Delivery Hero means that Rocket now has a food service network of 78 million orders processed — the largest outside of China, alongside its other investments in FoodPanda and HelloFresh, the latter being the recipient on an additional 130 million euro investment, giving Rocket a 52-percent stake and aiming it at the U.S. marketplace which as of now is led by sites like GrubHub and Foodler.
In a conference call, Rocket Chief Executive Officer Oliver Samwer touted the benefits of food delivery as “the emerging frontier of e-commerce” and Rocket can become a “gorilla” of the take-out industry. Samwer also anticipates that his investment company’s growth and margin rates can exceed that of GrubHub and Just Eat, though no details were given as to how that would be achieved.
The terms of the investment deal, according to an email sent out by Delivery Hero boss Niklas Oestberg, were that 287 million euros were to buy shares from the company, while the other 209 million euros went to buying a stake sold by existing investment partners, which include Insight Venture Partners LP, Kite Ventures PE, ru-Net Ltd., Point Nine Capital, Phenomen Ventures and Vostok Nafta Investment Ltd.