On Sunday, Deliveroo, a British food delivery company, announced that it had raised $385 million from private funding as it prepares for an expansion to help it compete with publicly traded rivals such as Just Eat and Delivery Hero.
The funding assesses the business at above $2 billion and will let Deliveroo enlarge its technology team, enter new markets, and expand its concept of delivery-only restaurants run out of centralised kitchens it operates, stated the company.
The number of Deliveroo locations has increased by 60 percent over the past year, and it is currently operating in more than 150 cities in 12 countries, said a spokesman. He refused to comment on its next expansion moves.
Aside from Britain, where it operates in 60 towns and cities, it also offers food delivery in eight European countries, Hong Kong, Australia, and the United Arab Emirates. Its closest rival is the Foodora unit of the Delivery Hero of Germany.
The new investment in Deliveroo is managed by funds linked with T. Rowe Price Associates and Fidelity Management & Research, said the company. Existing investors General Catalyst, DST Global, Accel Partners, and Index Ventures are also executing follow-on investments, improving their positions in the company, said Deliveroo.
“There is a lot of room to rethink how we eat,” stated a partner at venture capital firm Index Ventures, Martin Mignot, which has investments in four previous Deliveroo funding rounds.
The company has accumulated $474.6 million since 2012, the year of its founding in, according to a venture funding data from CrunchBase.
Like the taxi app Uber, which was stripped of its operating license in London on Friday, Deliveroo has been reprimanded by unions that say it is exploiting its staff by not offering basic protections. Some of its delivery riders are seeking legal action to push for workers’ rights.
Deliveroo has earlier said it would provide its self-employed riders insurance and sick pay if the government amended the law so it could offer some, rather than all, the entitlements enjoyed by full-time staff members.
In a Sept. 20 regulatory filing, Roofoods, its parent company said that Deliveroo boosted revenue by more than 600 percent in 2016 while operating losses mounted, although, at a slower rate.
Revenue grew to 128.56 million pounds. However, administrative expenses and delivery costs resulted in an operating loss of 141.05 million pounds, up 367 percent year on year, it stated in a filing with UK Companies House.
Even though the company trumpeted a $2 billion-plus valuation, that remains less than half of those of its listed rivals. The market capitalisation of Delivery Hero is 5.95 billion euros (5.27 billion pounds) while the UK-based Just Eat’s valuation is at 4.66 billion pounds