Ride hailing platform Uber has begun discussions to acquire UK-based food delivery service Deliveroo, giving NGP Capital, the venture capital firm backed by communications technology producer Nokia, an exit, Bloomberg reported yesterday.
The acquisition would be sized in the billions of dollars, people familiar with the plans told Bloomberg. Deliveroo was valued at more than $2bn when it last raised money, in a $482m series F round that closed in November 2017.
Founded in 2013, Deliveroo runs an online-based service that enables users to order food from local restaurants for delivery, making use of a network of couriers on bicycles and in cars as well as a predictive algorithm that plots out the most efficient routes.
In addition to sourcing food from restaurants, the company has begun investigating a business model where it would make its own low-cost food from its own kitchens while automating the delivery process. It also formed a $6.8m fund in May 2018 to invest in restaurants.
The service is available in some 200 cities across Europe, Asia, South Africa and Australia, and currently competes against Uber Eats, the on-demand food delivery service Uber launched in 2014.
An acquisition would boost Uber Eats’ global presence but a successful offer would need to be “considerably” greater than Deliveroo’s most recent valuation in order to be accepted, the sources said.
Financial services and investment group Fidelity Management & Research co-led the November round with investment manager T. Rowe Price. The round included DST Global, Accel, General Catalyst, Index Ventures and unnamed private investors, and took Deliveroo’s total funding to $957m.
NGP, then known as Nokia Growth Partners, took part in the company’s $275m series E round in 2016 at a post-money valuation of about $1bn. Bridgepoint, DST Global and General Catalyst co-led the round, which also featured Greenoaks Capital.
Deliveroo’s earlier investors include Hummingbird Ventures, Index Ventures and Hoxton Ventures.
Uber, which has set 2019 as a target date for its initial public offering, is also currently in talks to acquire United Arab Emirates-based ride hailing service Careem for a reported price of $2bn to $2.5bn.