Contact: Erin Zion
Online food-ordering companies have acquired a taste for international fare lately. Takeouts of these businesses are on a tear, and all of the action is happening outside the US. Today’s deals are no exception, as German vendors foodpanda and Delivery Hero both sell off and acquire Latin American and Indian assets to consolidate rapid expansion and increase international footholds, while UK-based Just Eat’s subsidiary reaches for online food delivery website Delivery Town in Canada.
In the US, the supersized merger of GrubHub and Seamless North America in May 2013, followed by an IPO last April, created a leader in the market, where powerful network effects – more customers bring more restaurants, more restaurants bring more customers, and so on – may have tamped down the enthusiasm for dealmaking. But elsewhere, many markets are still up for grabs. According to The 451 M&A KnowledgeBase, there have been 17 deals in this sector so far this year (15 since July), up from just five for all of last year, and all of these transactions have occurred outside US borders.
Including today’s acquisitions, Rocket Internet’s foodpanda has snagged four companies to jump into new markets: Entrega Delivery in Brazil, Delivery Club in Russia, TastyKhana in India and PedidosYa in Mexico. Germany’s Delivery Hero has shored up its home market through the purchases of Subdelivery and Pizza.de, and has continued its expansion into Latin America with the pickup of foodpanda’s hellofood assets. Just Eat has also nabbed three businesses this year – one in its core UK market, one to expand in France and one to further its growing Canadian operations – along with signing a joint venture with Brazil-based iFood.
The sense of urgency to ramp up across many international markets, mixed with the deep pockets of many players in this space, should lead to continued M&A. As freshly debuted public companies, GrubHub and Just Eat have plenty of currency for acquisitions, while private companies Delivery Hero and foodpanda have raised a collective $735m in venture capital.
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