Delivery Hero has sold its 4.5% stake in British food ordering platform Deliveroo.
The Berlin-based company announced the $97 million sale of its 68 million shares in a news release Monday (Jan. 29), with the sale expected to settle Thursday (Feb. 1).
“Following settlement, the company will not hold any remaining shares in Deliveroo,” the release said. “The placement underlines Delivery Hero’s commitment to disciplined capital allocation.”
Delivery Hero first purchased its stake in Deliveroo in 2021. At the time, food delivery companies were riding high, as the pandemic drove people away from dining in restaurants.
Since then, many companies have struggled as food inflation and other economic challenges have kept diners from ordering meals.
For example, Deliveroo’s recent earnings showed that the company’s average monthly active consumers rose by around 400,000 from the prior quarter, that number still fell 2% year over year, while total orders and revenue were flat.
And Just Eat Takeaway, the company that owns Grubhub, said earlier this month that its North American business saw orders fall 13% year over year to 67 million, while gross transaction value dropped by 15%.
“If you look at the U.S., we’ve made some difficult decisions that you’ve seen in the last year,” CEO Jitse Groen said on an earnings call. “We’re cutting costs over there to make sure that our cash burn in the U.S. goes to zero as rapidly as possible. … At the same time, of course, we’re also trying to improve their business. But we’ve significantly reduced the cash flow.”
As noted here at the time, Grubhub’s competitors have continued to increase their use and market share. For example, DoorDash reported 24% year-over-year growth in total orders in the third quarter in November, while the platform’s marketplace gross order value (GOV) increased by the same percentage.
And Uber said on its third-quarter earnings call in November that delivery gross bookings had climbed 18% year over year, with revenue from deliveries increasing by 21%.
Meanwhile, PYMNTS reported last month on these companies’ use of generative artificial intelligence (AI) to better meet customer demand.
Among them is India’s Zomato, which in late December announced it was integrating its new PicNic AI, short for Picture Nicely AI, into the platform. This tool uses machine learning models to upgrade photographs of menu items to make them look more enticing.