UK-headquartered online food delivery giant Deliveroo is gearing up to set up operations in the Indian market. Valued at $2 Bn, the Fidelity and T. Rowe Price-backed startup is reportedly looking to hire a country head, who would be spearheading its India launch.
As per sources, Deliveroo is also in the process of onboarding a full-fledged team in the country. Once it enters the Indian food delivery space, the company will be competing against the likes of homegrown unicorn Zomato, Swiggy and Ola-owned Foodpanda, among others.
Commenting on the development, a source requesting anonymity said, “They are in the midst of getting on board a person who will spearhead the launch in India along with building a team. After securing new funding, expanding into new geographies was on the cards for them.”
Growth Story Of $955 Mn Funded Deliveroo
Started in 2013 by former investment banker Will Shu and Greg Orlowski, who later quit the venture in 2016, Deliveroo is a London-based online food delivery startup with a presence in up to 140 cities across 13 countries in Europe, Asia-Pacific and the Middle East.
At present, the company generates revenue through commission fees from restaurant partners. Additionally, it charges customers a specific fee against each order.
Till date, Deliveroo has raised nearly $955 Mn in funding from a clutch of investors. It originally secured $3.6 Mn Series A investment in a round led by Index Ventures and Hoxton Ventures. A bevy of angel investors also participated in the round.
Later in January 2015, the food delivery startup picked up a sizeable funding of $25 Mn in Series B from Accel Partners, Index Ventures, Hoxton Ventures and Hummingbird Ventures. The deal reportedly took place at a post-money valuation of $100 Mn.
In July of the same year, the startup raised another $70 Mn in Series C funding from Greenoaks Capital and Index Ventures. Only a couple of months later, in November, Deliveroo made headlines once again when it secured $100 Mn funding in a Series D round from DST Global and existing backers.
In August 2016, as part of a Series E round, Deliveroo swept up $275 Mn investment from hedge fund Bridgepoint. Last year, in September, the food delivery platform closed a $480 Mn Series F round from Fidelity Management, Accel Partners, T. Rowe Price and others, raising its valuation to $2 Bn.
Globally, Deliveroo competes against Just Eat, GrubHub, UberEATS and Hungryhouse, to name a few.
Why Deliveroo Its Eyeing The Indian Food Delivery Market
The online food services market in India is expected to reach $2.9 Bn by 2019. According to another study by Netscribes Research, the foodtech sector is expected to expand by 34%-36% between 2015 and 2020. The food delivery space of the Indian startup ecosystem is populated by big names like Zomato, Swiggy, Foodpanda, and others.
In the country’s consumer services sector, which includes food delivery and online grocery, over $300 Mn was raised across 83 deals as of November 2017, as per Inc42 DataLabs. The biggest fundraise in this space was made by Swiggy, when it secured $80 Mn from Naspers, SAIF Partners and others. As far as M&As are concerned, the consumer services sector took the top slot with 17% M&As falling under it.
A lot has been happening in the Indian online food delivery segment. While investment giants like SoftBank and Tencent are gearing up to pump a massive investment of $250 Mn in Swiggy, its biggest rival Zomato reached profitability in September 2017 throughout the 24 countries where it operates, and across all its businesses.
Over the last few months, the sector has also seen the entry of new players like Google Aero and UberEATS. Most recently, in December, homegrown cab aggregator Ola announcement the acquisition of Foodpanda India from Germany based Delivery Hero Group. As part of the deal, Ola has also committed to invest $200 Mn in Foodpanda India.
To be able to survive in the increasingly competitive India food delivery sector, Deliveroo will have to maintain a razor-sharp focus on bolstering its services and getting ahead of rivals. However, given that its war chest is currently filled up to the brim, the feat might not be that challenging for the UK-headquartered startup.