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Berlin-based Delivery Hero acquires Foodpanda

The valuation of the deal is yet to be revealed
Last Updated 10 December 2016, 17:25 IST

 Berlin-based online food takeaway service Delivery Hero, one of Europe’s biggest startups, will acquire competitor Foodpanda, a sign of further consolidation to fend off new competition in Europe’s sought after food-delivery business.

Delivery Hero, which was valued at  € 2.89 billion ($3.05 billion) in its last funding round a year ago, in a statement on Saturday said it signed a definitive agreement to buy Foodpanda, itself a Berlin-based startup.

Delivery Hero and Foodpanda are both backed by German ecommerce firm Rocket Internet, which invested  € 800 million in Delivery Hero last year and holds 49.1% in Foodpanda which focuses on deliveries in Eastern Europe, the Middle East and Asia.

Delivery Hero said in a statement that the acquisition will be funded by issuing new shares, with major shareholder Rocket increasing its stake by 1.1 percentage points to 37.7%.

Based on Delivery Hero’s last valuation, the sales value of Rocket’s stake in Foodpanda amounts to roughly  €31.8 million. The companies did not disclose a purchase price but Foodpanda struggles with sales in Asian countries and other media reported earlier this year that it failed to attract buyers at a $10-15 million valuation for its India business and closed its operations in Indonesia.

Last month, Foodpanda announced plans to sell its Russian business, known as Delivery Club, for 100 million euros to Mail.ru, owners of VKontakte, the country’s most popular social networking site. Globally, Foodpanda took in two million monthly food orders compared with Delivery Hero’s 18 million monthly orders. After consolidating overlapping businesses, Delivery Hero expects to be active in 47 countries, it said.

Currently Europe is home to many of the most active international players in the online food takeaway business and they are counting on their local ties, established customer bases and extensive restaurant networks to fend off new competition from the likes of Uber and Amazon.

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(Published 10 December 2016, 17:25 IST)

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