The salvation for Deliveroo, the UK-based food delivery service that Will Shu, its co-founder and long-time CEO, started in 2013, was to be acquired—by the American food delivery firm DoorDash. This landmark agreement of £2.9 billion. In many ways, this acquisition represents the beginning of the end for Deliveroo, which claims to be present in nine countries with more than 130,000 delivery riders. In fact, this merger will heighten competition overall in the UK market. Prepare competitors such as Just Eat and Uber Eats to sweat it out.
Deliveroo’s 2024 gross sales were around £2 billion, confirming the zippiness of Deliveroo as a separate, listed company. Following the news of a proposed settlement with DoorDash, Deliveroo’s stock price skyrocketed. This increase reflects the investor optimism about the company’s future prospects, given it will no longer be the indentured servant of its new owner. Will Shu, who serves as the chief executive and co-founder of Deliveroo, expressed pride in the company’s achievements, stating, “I am very proud of everything we have achieved as a standalone business.”
In his initial statements on the acquisition, Shu referred to the deal as a “transformative” move for both companies. Together, the new company will serve about 50 million customers every month across more than 40 countries. This expansion will allow DoorDash to compete on a larger, more aggressive scale in the increasingly global food delivery market.
Shu has a 6.4% stake in Deliveroo, totaling an estimated £172.4 million windfall from the acquisition. Deliveroo opened its IPO at 390p a share on the London Stock Exchange in April 2021. Since then, the company has positioned itself to overcome many challenges and take advantage of exciting opportunities in the increasingly competitive food delivery industry.
The merger together with other moves has raised fears about UK investment. This concern follows what had been a rising tide of American companies purchasing UK-listed firms. Matt Britzman, a senior equity analyst at Hargreaves Lansdown, noted that DoorDash aims to “squeeze out” rivals like Just Eat and “rattle Uber” in the UK market. This strategy shows DoorDash’s strategy to increase its market share even after the merger has been completed.
Danny Rimer of Index Ventures, one of Deliveroo’s earliest backers, previously remarked that he would have favored a US listing for Deliveroo if given another chance. This feeling reflects a broader shift in the mood around investment within the technology industry. American companies are having a bigger impact on the UK market than ever before.
The partnership between DoorDash and Deliveroo represents a significant evolution in the landscape of local commerce, as stated by both firms: “The combination with Deliveroo will strengthen DoorDash’s position as a leading global platform in local commerce.”