Zomato to sell UAE business to Delivery Hero

Berlin based food delivery player Delivery Hero has acquired United Arab Emirates (UAE) business of Gurugram based food delivery and restaurant discovery company, Zomato.

The acquisition will add 1.2 Mn monthly orders and $2 Mn monthly revenue to Delivery Hero’s Middle East and North Africa region business and will strengthen its leadership position in the UAE. The online food ordering company Delivery Hero is present across 41 countries in Europe, the Middle East & North Africa (MENA), Latin America and the Asia-Pacific region. Delivery Hero also operates its own delivery service primarily in over 200 cities around the world. In India, Delivery Hero was invested in Foodpanda but later sold it for 1% stake in Ola in 2017.

UAE was the first global foray of Zomato in 2012 and soon accounted for 20% of its orders. The company also launched its premium service Zomato Gold in UAE in 2017 and in one year had over 380 restaurant partners for over 15,000 Zomato Gold members.

Zomato has been in a tough situation since its Bengaluru-based rival Swiggy raised $1 Bn in 2018, at the end to the year after joining the unicorn club earlier in the year. To challenge this, Zomato has also been in talks to raise a large funding round of $500 Mn-$1 Bn. Zomato recorded $1Bn in annual gross merchandise value. It also posted a 40% growth in its revenue for FY18 and targeted expansion to 100 cities across India.

Delivery Hero acquires Foodpanda

Berlin based online Food takeaway service Delivery Hero, one of Europe’s biggest start-ups will acquire competitor Foodpanda, a sign further consolidation to fend of new competition in Europe’s sought after food delivery business. The acquisition brings together two top food delivery startups based in Germany.

After this acquisition, the combined group is expected to process over 20 Million orders per month across 47 countries. Delivery Hero currently serves across 33 countries and Foodpanda in 22 countries. With this deal, Rocket Internet stake in Delivery Hero will grow up to 37.7%. The acquisition of Foodpanda will enable Delivery Hero to consolidate its market leadership in the Middle East and add 20 new countries in Eastern Europe, MENA and Asia.

Delivery Hero, which was most recently valued at $3.1 Billion and competes directly with publicly listed Just Eat, along with newer premium entrants such as Deliveroo, Uber Eats & Amazon. Delivery Hero and Foodpanda are both backed by German ecommerce firm Rocket Internet, which has invested 800 million euros in Delivery Hero last year and put 300 million euros into Foodpanda which focuses on deliveries in Eastern Europe, the Middle East and Asia. 

Foodpanda has built a fantastic position and service offering some of the largest food delivery markets globally. In November end, the company had announced the participation of Sunny Leone in their digital marketing campaign. The company had said that the campaign is going to target consumers through different Social Media platforms like Snapchat, Facebook, and Instagram etc.