Online services and media group Naspers has invested €387m ($423m) in Germany-based online food ordering platform Delivery Hero in a deal that reflects Naspers’ growth and ongoing ambitions.
Delivery Hero’s valuation in the investment is unchanged from the $3.1bn post-money valuation at which it closed its last funding in mid-2015, which would give Naspers a stake of approximately 13.5%. It will also obtain a seat on Delivery Hero‘s supervisory board.
Founded in 2011, Delivery Hero operates an app-based service that spans more than 40 countries across Europe, Latin America, the Asia-Pacific region, the Middle East and North Africa, allowing users to order food from local restaurants that is then delivered to their homes.
Delivery Hero has raised more than $1.4bn in funding altogether, securing $110m in the mid-2015 round, with the cash reportedly coming from two undisclosed public market investors. E-commerce holding group Rocket Internet had invested $568m in February the same year, in a deal that involved Delivery Hero becoming part of Rocket’s Global Online Takeaway Group.
The company’s customer base was boosted in December 2016 through the acquisition of competitor FoodPanda, also part of the Global Online Takeaway Group, which held a formed 37.7% share of Delivery Hero once the deal was closed.
Other Delivery Hero investors include Tengelmann Ventures, the venture capital vehicle for retailer Tengelmann, as well as Vostok Nafta, Insight Venture Partners, General Atlantic, Kite Ventures, Holtzbrinck Ventures, Ru-net, Team Europe, Kreos Capital, Phenomen Ventures, Luxor Capital and Point Nine Capital.
Nasper’s funding comes at a time when it is continuing to expand through strategic investments. It took part in the $175m series C round closed by mobile classifieds platform LetGo in January 2017 and paid $72m to increase its stake in South Africa-based e-commerce marketplace Takealot to 53.5% three months later.
The firm also formed a dedicated corporate venturing unit called Naspers Ventures in May 2016 and is using it to diversify into new areas such as agricultural data – it led FarmLogs’ $22m series C round in January this year – and online lending, through an investment in Brazil-based company Creditas the following month.
Naspers and Rocket Internet are probably the two biggest players in e-commerce and online services across the developing markets, so the fact they will be working together through Delivery Hero raises some tantalising questions over the former’s ambitions.
Rocket Internet has been floundering over the past two years as its subsidiaries continue to rack up losses while its own share price fluctuates, and it could hypothetically be an interesting acquisition target for Naspers, which could then move to solidify its position in a range of countries.
In the shorter term however, the deal will give Naspers a sizeable entry point into the online food services sector. The closest it has come so far is through iFood, a subsidiary of it Brazil-based portfolio company Movile.
Naspers CEO Bob van Dijk explained: “Food ordering and delivery presents an attractive opportunity for us. It is a large, underpenetrated, and growing market with potential for success across a broad range of geographies that Naspers knows well.
“Delivery Hero has already achieved significant traction in some markets, but we believe that the vast majority of high-growth markets are at the beginning of the opportunity cycle.
“Naspers’ deep expertise in building leading marketplace businesses in high-growth markets, which includes the leading food delivery business in Latin America, combined with the strength of Delivery Hero’s platform, positions us well to build a leading, global food ordering and delivery platform.”
Niklas Östberg, Delivery Hero’s chief executive, added: “Naspers’ capital and know-how will support our growth momentum as we continue to focus on creating an amazing takeaway experience.”