Online food delivery service Delivery Hero agreed on Friday to buy South Korea-based counterpart Woowa Brothers in a $4bn deal that will allow internet companies Naver and CyberAgent to exit.
Woowa Brothers has built an app-based food ordering service that was responsible for 365 million orders in the year ending September 2019. It has more than 110,000 restaurant partners and made approximately $275m in revenue in 2018.
Delivery Hero intends to expand its Korean activities through the acquisition in addition to accessing areas where Woowa Brothers is active, such as cloud kitchens and adjacent on-demand services.
The transaction will follow a $320m round for Woowa Brothers that was led by hedge fund manager Hillhouse Capital in December 2018 that also featured Sequoia Capital and GIC, at a $2.6bn valuation.
Naver had reportedly invested $31m in Woowa Brothers in late 2017, the year after it raised $70m from Hillhouse Capital, which supplied approximately $50m, Altos Ventures, GreenSpring Ventures and Duke Management Company.
Investment banking firm Goldman Sachs had invested $36m in the company in 2014, in the wake of $12m in seed funding from CyberAgent subsidiary CyberAgent Ventures, Alto Investments and IMM Investments earlier the same year.
Niklas Östberg, Delivery Hero’s chief executive, said: “We are excited to enter into a strategic partnership with Woowa Brothers, which is at the forefront of innovative technological services and has put Korea on the map in the global online food delivery industry.
“We fully support Woowa Brothers to continue making investments and innovate for the benefit of the wider industry participants, including consumers, restaurants, employees and riders. To this end, the joint venture will have the full support of, and access to, Delivery Hero’s global resources.”
