Corporate-backed incubator and venture capital Rocket Internet paid €496m ($568m) yesterday for a 30% stake in Germany-based online food ordering service Delivery Hero, which it revealed today will form the basis of considerable increase in its interest in the subsector.
The funding consists of a $328m equity investment in Delivery Hero, with the rest allocated to a secondary share purchase. Delivery Hero has not disclosed whether any of its existing investors have exited through the deal.
Tengelmann Ventures, the corporate venturing arm of retail chain Tengelmann, is an investor in Delivery Hero, along with Vostok Nafta, Insight Venture Partners, Kite Ventures, Holtzbrinck Ventures, Ru-net, Team Europe, Kreos Capital, Phenomen Ventures, Luxor Capital and Point Nine Capital.
The funding means Delivery Hero has now raised approximately $663m in total equity, including $350m from a series G round closed in September 2014.
Delivery Hero operates a multinational network of websites through which users can order food to be delivered from local restaurants. It currently operates in 24 countries, and claims to be the market leader in 19.
Niklas Östberg, Delivery Hero’s chief executive, said: “Delivery Hero has a very long-term vision to transform the food delivery industry for the sake of transparency, quality, convenience, and speed. Rocket Internet is a perfect long-term investor to achieve this.”
The funding, which follows a $350m round raised by Delivery Hero’s China-based counterpart Ele.me last week, was one of several announced by Rocket Internet today, together with the formation of a new entity, Global Online Takeaway Group, which will oversee its food ordering businesses.
Rocket Internet also pumped $114.7m into Germany-based food delivery service HelloFresh at a $714m valuation today, boosting its share in the company from 37.4% to 51.7% and taking a majority stake in the process. Insight Venture Partners helped push the round to $126m.
HelloFresh runs a service through which customers can order boxes of ingredients to be delivered to their homes, along with recipes, enabling them to cook new meals without the effort of shopping or finding new recipes.
Rocket Internet, which paid €30.1m to acquire additional shares in HelloFresh last month, made its latest investment alongside $11.3m of funding provided by Insight Venture Partners.
HelloFresh has now raised more than $226m since it graduated from Rocket Internet’s incubator in 2011. Past investors include Vorwerk Direct Selling Ventures, the investment arm of household goods and cosmetics producer Vorwerk, Holtzbrinck Ventures, Kinnevik and Phenomen Ventures.
In addition, Rocket Internet acquired two other online food ordering businesses, Spain-based La Nevera Roja, which had raised €10.6m from investors including Ad4Ventures Capital, the corporate venturing unit of media group Mediaset; and Italy-based Pizzabo.
Finally, FoodPanda, the online food delivery business in which Rocket Internet holds a 55% stake, wholly acquired several Asia-based competitors for an undisclosed sum, including the India-based division of UK-based Just Eat, which builds on its acquisition of another India-based business, TastyKhana, in November 2014.
The other companies bought by FoodPanda include FoodRunner, a spin-out of Singapore-based e-commerce company Dealguru; Pakistan-based restaurant reservation service EatOye; Hong Kong-based Koziness.com; and Thailand-based Food By Phone.
Ralf Wenzel, FoodPanda’s co-founder and CEO, said: “With the recent acquisitions FoodPanda becomes the market leader across South East Asia. The combined expertise and experience of several great local companies allow us to significantly improve our offering and service to our customers.”
The deals will collectively expand FoodPanda’s market to 39 countries across five continents, while Rocket Internet’s Global Online Takeaway Group unit as a whole now partners with more than 140,000 restaurants across 64 nations.
The formation of the group follows a similar deal in September 2014, when five Rocket-backed fashion e-commerce companies combined to form the Global Fashion Group.
Rocket Internet said in a statement that it considers food and groceries to be the “next frontier” of e-commerce, and its investments this week back up that claim. Although the online food ordering business is relatively mature technologically, it is still growing at a rapid rate as companies enter new markets and recruit new customers, and Global Online Takeaway Group now appears to have the biggest global reach in the sector.