Published: Sun, September 23, 2018
Economy | By

Uber Said to Be in Talks to Buy Food Delivery Firm Deliveroo

Uber Said to Be in Talks to Buy Food Delivery Firm Deliveroo

A bid for London-based Deliveroo, which was last valued at more than US$2 billion, would mark a major attempt by Uber to dominate the food delivery business in Europe.

The value of the proposed deal is not known, according to Bloomberg, which first reported on the talks, citing people familiar with the matter - but they would likely have to be for more than $2 billion, the United Kingdom company's latest valuation after raising $98 million. After selling its ride-hailing businesses in Southeast Asia, China and Russia, Uber is eager to buy competitors, rather than sell its remaining local businesses. The San Francisco-based company is weighing other acquisitions, too.

For Uber, which is planning an IPO next year, the food delivery sector is a top priority.

The two firms have been jostling for first place in the food delivery market since 2014, thanks to the inception of Uber Eats.

Deliveroo is one of Europe's biggest startup success stories: Founded in 2013 by Americans Will Shu and Greg Orlowski, Deliveroo enlists contract employees as couriers, who deliver food from local restaurants in some 200 cities all over the United Kingdom, the European Union, Asia, and Australia. Plus, the talks could end abruptly because Shu and Orlowski are not keen on letting go of their professional independence. It seems the United Kingdom food delivery start-up has deliberately avoided the U.S. market, cited Bloomberg. Recently it also announced that now it will also host food chains that do deliveries with their own employees.

"Innovation is crucial to Deliveroo's continued growth and Food Market is a great example of how we're combining world-class technology with our passion for great food", said Dan Warne, MD at Deliveroo, UK and Ireland.

Just Eat shares fell by as much as 9 per cent at one point in London before paring some of the losses to close down 4.8 per cent at 674p.

Liberum Capital and Peel Hunt both reaffirmed Just Eat as a "buy" today, without specifying a price target on the shares.

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