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When they were young

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When Delivery Hero was young: the early years

In 2010, a few entrepreneurs in Germany organized to capitalize on the mobile revolution via takeout

Innovation series by Ronny Kerr
July 13, 2016
Short URL: http://vator.tv/n/466c

As our readers know, Vator has started a series called When they were young.

It's a look back at the modest days of startups, what traction they had in their first few years, and how they evolved. In the end, we hope to provide a glimpse into what great startups looked like in their first three years.

Stories like these are always well received because it reminds us that anyone, regardless of pedigree and environment, can rise above the noise and have great influence. They show us the value of being resilient, persistent, and committed. If we can follow their footsteps, maybe we too can have similar success.

My last segment in this series focused on WeWork. This segment is on Delivery Hero.

— Delivery Hero's First Year —

Founded: October 2010

Though the launch of Delivery Hero Holding wasn't officially announced via press release until November 2011, the company was founded by Berlin-based incubator Team Europe in October 2010 along with another food delivery service, Lieferheld.de. ("Lieferheld" is German for "Delivery Hero.")

Founders (ages at the time): Niklas Ostberg (30), Markus Fuhrmann (??), and Nikita Fahrenholz (25)

Initial company description: "Delivery Hero is striving to become the leading network of food delivery sites in the world.

"In essence, we are going to build the future of online food ordering. Choice and Convenience are the key benefits for our customers. They can easily find their favorite dish through thousands of online menu cards. Orders as well as payments can conveniently be placed online and restaurants are peer-reviewed. Only a few clicks are required and delicious food is on its way to our customers."

First funding and traction - at six months: An April 2011 piece on Bloomberg, which profiles several emerging mobile-based food delivery services, revealed that Lieferheld had already raised €5 million from the venture capital arms of publisher Georg von Holtzbrinck GmbH, German food retailer Tengelmann, and Team Europe.

Additionally, the article revealed stunning momentum from the food delivery startup:

"Lieferheld, which is adding 200 restaurants a week, said an advertising agreement with Germany’s largest private broadcaster, ProSiebenSat.1 Media AG, may help it eclipse local rival Pizza.de GmbH by the end of the year with 6,000 restaurants and 500,000 customers."

The photo at left, also from Bloomberg, features Lieferheld CEO Fabian Siegel.

— Delivery Hero's Second Year —

Second funding and traction - at one year and one month: In November 2011, Lieferheld and Delivery Hero announced that they had raised €8 million in funding led by Moscow-based ru-Net and Kite Ventures with participation from Team Europe and Point Nine Capital.

The new funding brought the company's total funding to €15 million since their founding, implying that an earlier seed round had gone unannounced.

In addition to the new funding, Delivery Hero also launched its food ordering and delivery service in Australia and Russia in partnership with over 400 restaurants. The company said it also aimed to launch in four more markets by the end of 2011 and three more in 2012. At the time, Delivery Hero already powered food delivery from "thousands" of restaurants.

Third funding, expansion, and traction - at one year and four months: At the end of February 2012, Delivery Hero announced that it had acquired a controlling interest in Lieferheld while also investing in UK-based hungryhouse. The moves were financed by a new funding round, but the amount was not disclosed. As a result of Delivery Hero and Lieferheld working closer together, the joint venture was to be headed up by co-CEOs Niklas Östberg and Fabian Siegel.

By this time, Delivery Hero was operating in six different markets under a few different names:

  • Australia: Delivery Hero
  • Germany: Lieferheld
  • Mexico: SuperAntojo
  • Russia: Foodik
  • Switzerland: Foodarena
  • UK: hungryhouse

In total, Delivery Hero had globally partnered with more than 12,000 restaurants, served three million customers, and expected its 2012 "marketplace revenue" to exceed €150 milion.

Fourth funding, expansion, and traction - at one year and six months: In April 2012, Delivery Hero announced that it had acquired stakes in OnlinePizza Norden Group, a food delivery business with operations in Sweden (OnlinePizza, Mat 24), Finland (PizzaOnline), Austria (WillEssen), and Poland (PizzaPortal). (As TheNextWeb reported, Östberg had formerly served as chairman of OnlinePizza Norden, so the acquisition wasn't a complete surprise.)

The acquisition was financed by a round of funding that brought Delivery Hero's total raised to €40 million.

By this time, Delivery Hero had globally partnered with more than 19,000 restaurants, served more than four million customers, and had upped its expectation of 2012 "marketplace revenue" from €150 milion to €250 milion.

Acquisition and management change - at one year and seven months: In May 2012, Delivery Hero announced that it acquired PizzaOnline in Finland "for a single-digit million amount." The company had previously held a minority stake.

The company also appointed Miša Obradović of Germany's Seven Ventures as COO of the global business.

Fifth funding and traction - at one year and 10 months: In August 2012, Delivery Hero raised a €40 milion round, led by previous backer Kite Ventures with participation from Kreos Capital. The round brought its total funding to €80 million, or nearly $100 million.

In total, Delivery Hero had, by this point, served more than 32 million meals from 22,000 restaurants across its global network in 11 countries.

— Delivery Hero's Third Year —

Traction - at two years and one month: According to a November 2012 report in the Financial Times, Delivery Hero generated €25 million in revenues the previous year by managing €250 million worth of food orders across its 12 global markets.

Management change - at two years and three months: In January 2013, Fabian Siegel stepped down as co-CEO, leaving Niklas Östberg as Delivery Hero's sole CEO. The company said the change was not linked to a €58,050 fine given to Siegel and six other employees for copying menu information from a rival in 2010.

A spokeswoman called the timing an “unfortunate coincidence."

Later in the month, Delivery Hero announced the full acquisition of UK-based hungryhouse, portraying the move as directly threatening to the interests of another food delivery company, Just Eat. At the time, Delivery Hero had 450 employees and was serving up food from 33,000 restaurants around the world, including newer additions like the Czech Republic and China.

Traction - at two years and four months: In February 2013, Delivery Hero announced its order volume had increased by 169 percent in 2012 to over €300 million annually. The company said it was confident it would break even in 2013.

Partnership - at two years and five months: In March 2013, Delivery Hero announced a technology partnership with Danish food delivery platform Hungry.dk, which had been formed by ex-employees from Just Eat.

Investment and traction - at two years and eight months: In June 2013, Delivery Hero announced increased investments in India-based food delivery service TastyKhana, bringing the company's representation to 14 countries woldwide.

Sixth funding - at two years and nine months: In July 2013, Delivery Hero announced it had raised $30 million in Series D financing led by Phenomen Ventures with participation from existing investors. The company also said it was managing $400 million in annual order volume across millions of monthly orders.

Homepage screenshots courtesy of Internet Archive's Wayback Machine.


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