Just Eat, a London-based provider of online food ordering and delivery, has purchased several smaller competitors in Spain, Italy, Brazil, and Mexico for €125 million in cash (approximately $139.3 million), bringing another bite of consolidation to the highly crowded food-on-demand space.
The companies were sold by Rocket Internet, a Berlin-based organization that's part venture capital firm and part network of companies, as well as by foodpanda, a Berlin-based online food ordering service funded by Rocket Internet. They include:
Interestingly, foodpanda still has properties named "hellofood" delivering food in Saudi Arabia, but the company has announced no plans to change the name. Across Asia (including India, Thailand, and Indonesia) and Europe (including Russia, Hungary, and Romania), the company typically operates under its primary name “foodpanda.”
“The divestment in Latin America allows us to focus on our key markets across Asia, the Middle East and Eastern Europe where foodpanda has a market leading position and to which we can now dedicate more resources and capital to grow our business and improve the efficiency of our operations,” said Ralf Wenzel, co-Founder and CEO of foodpanda.
Just Eat, launched in 2006, has been growing rapidly over the past couple years. Compare its financial numbers for the first half of 2014 to the first half of 2015:
HY 2014
HY 2015
The new acquisitions will likely fuel even more growth in 2016 and the years to come, as the company expands to new markets. Shares of the company soared by 6.47 percent to 383.31 pence on word of the announcement, suggesting that investors are bullish about Just Eat’s growth prospects.
In addition to Spain, Italy, Brazil, and Mexico, more markets served by Just Eat include the UK, Denmark, Canada, France, Australia, New Zealand. The company hasn’t seemed interested in trying its chances in the U.S. market.
They may be making the right decision to stay away for now, considering how crowded the market is with on-demand services already. One of my predictions of the year, in fact, predicts a lot more consolidation in this space. A couple warning signs came at the close of 2015, when Sidecar (which had pivoted from ridesharing to food delivery) shut down and Instacart laid off a small portion of its team.
If Just Eat does ever try to enter the U.S. market, I imagine it would happen as it did today: through the acquisition of a struggling smaller service.
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