- 10 January 2022
- Transport / Logistics Services
In the last hours of 2021, grocery and restaurant delivery giant Delivery Hero announced it had upped its existing stake in rivals Glovo to 80%.
Glovo has a large footprint in Europe, Asia and Africa. Delivery Hero lacks presence in many of those markets Glovo operates in and as such the merger is seen as complementary.
“[Glovo] felt like they would like to have a big brother supporting them, that they can reach their full potential,” Delivery Hero chief executive Niklas Östberg said of the reasoning behind the acquisition.
“There’s a lot of distraction of having a lot of investors with different perspectives, having constantly to go through fundraising processes. I think also realizing after Deliveroo IPO’d that being a public company might not be that great after all, especially if you’re passionate about building a great business and not about investors.”
“It will be an interesting dynamic there, I think we are very strong in the markets where we are present, we are not present in the UK but of course that is a highly competitive market now with Uber, Deliveroo and Just Eat,” Östberg said.
Delivery Hero has had its issues in the last year. In early 2021 it relaunched its services in its home country of Germany only to pull out again in December. This is indicative of the challenges faced by players in this market, none of which have made significant profits.
“It’s very hard to come as a distant number two or three, especially if it becomes very competitive. It’s very costly and I think at this point in time at least we want to be very focused on countries where we lead and where we have a good service and a superior product offering. We are very focused on being the best service in the markets we operate in,” Östberg said.