Deliveroo today announces that Amazon is leading a new $575MM Series G preferred shared funding round, alongside existing investors T. Rowe Price, Fidelity Management and Research Company, and Greenoaks.
This takes the total Deliveroo has raised to date to $1.53BN.
With this funding, Deliveroo will continue to build its world-class service—bringing customers the food they want whenever and wherever they want it, offering even more work for riders, and helping restaurants to grow their businesses by reaching new customers. The new investment will contribute to:
- Growing Deliveroo’s engineering team based in its London headquarters, creating more high-skilled jobs and building on London’s growing reputation as a tech hub.
- Expanding Deliveroo’s delivery reach in order to continue offering its service to new customers.
- New innovations in the food sector, for example through delivery-only super kitchens “Editions”, as well as new formats that will help restaurants expand to new areas at a lower cost and lower risk, bringing more choice to local neighbourhoods.
- Development of new products for customers to offer a more personalised experience, increased support for restaurant partners, and new tools to offer riders flexible and well-paid work.
Will Shu, founder and CEO of Deliveroo, said: “This new investment will help Deliveroo to grow and to offer customers even more choice, tailored to their personal tastes, offer restaurants greater opportunities to grow and expand their businesses, and to create more flexible, well-paid work for riders.
“Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organisation.
“This is great news for the tech and restaurant sectors, and it will help to create jobs in all of the countries in which we operate.”
“We’re impressed with Deliveroo’s approach, and their dedication to providing customers with an ever increasing selection of great restaurants along with convenient delivery options,” said Doug Gurr, Amazon UK Country manager. “Will and his team have built an innovative technology and service, and we’re excited to see what they do next.”
Commenting on the news, Catherine Shuttleworth, retail analyst and CEO at Savvy, said: “As Amazon take a stake in Deliveroo this morning we think this is a really significant step in the uk food market. We know from our stats that 42% of UK shoppers have used an app to order from a food delivery service (such as Just Eat, Deliveroo or Uber Eats). This rises to 74% for those aged 18-35. 12% having specifically used Deliveroo, rising to 28% among 18-34 year olds. In large part geographic coverage is their main current obstacle to penetration growth and Amazon could offer immediate scale. In perspective 16% of shoppers have used Amazon Prime Now (1-2 hour delivery service) though not necessarily for food.”
Some key figures:
- 49% of shoppers have bought anything from Amazon in the past month and 87% in the past year.
- 28% of shoppers are Prime subscribers. 40% of 18-34 year olds are Prime Subscribers
“So why should this make not just the food to go sector but food retailers including the supermarket sector, shiver? Well, younger shoppers see the likes of Deliveroo as an alternative route to meal for tonight so instead of going to Sainsbury’s Local or the Coop around the corner, it’s quicker and easier to have dinner delivered. This is all about a convenient solution and its take up is rapid and part of spend that replaces food spend elsewhere.
“Additionally environmental concerns will continue to rise up the shoppers agenda with more and more deliveries going out from all sorts of businesses. The impact on the environment is a ticking time bomb in the mind of consumers. Deliveroo’s network of cycle deliveries is in a strong position. The challenge will be scaling outside of cities and other large conurbations but this is a really interesting development.”
Michael Schirrmacher, managing director UK, Bloomreach, said internet retailers can find opportunity in Amazon’s latest move.
“Brands and retailers fear Amazon’s quest for dominance in every sector. Its services stretch from its heritage as a bookseller, through to web hosting and this morning’s multimillion investment in Deliveroo. Yet this shift towards becoming a general commerce destination leaves a lot of room for the specialists to flourish,” he said.
“Amazon might be where today’s consumers go for their everyday purchases, but those buying significant or ‘special’ items or gifts often look elsewhere. Brands have a huge opportunity to muscle into this section of the commerce market, but to build lasting relationships with customers they must deliver unbeatable personalised experiences that keep every type of customer coming back. Success here demands business has complete clarity about its brand, its purpose, its audience and its advantage.
“Being clear on who they are and what they stand for in each content iteration will enable brands to unlock deeper and more personal connections with their customers. Brands must use technologies that enable them to balance remaining flexible enough to personalise the experience for each customer with ensuring a single thread runs through all content. Doing so will ensure brands bond more closely with each and every customer on an individual level so they always choose it first over the commerce giants.”