Food delivery appetite continues as SoftBank courts Deliveroo
July 04, 2017
SoftBank is in talks with Deliveroo about participating in an upcoming funding round that could see the on-demand food delivery service reach a valuation of up to £1.5 billion, per Sky News. The company raised $275 million in Series E financing in 2016, which was co-led by Bridgepoint, DST Global and General Catalyst. Deliveroo is reportedly seeking to raise a similar amount in the near future.
For SoftBank, a Deliveroo deal would represent the latest in a string of investments as it seeks to deploy some of the $93 billion committed to its Vision Fund. It has already backed companies including Didi Chuxing, WeWork and OSIsoft. SoftBank may also be eager to acquire a stake in the business ahead of a widely-anticipated IPO.
Food delivery companies have to some extent dominated the VC headlines in Europe this year. Delivery Hero, the takeaway food app backed by Rocket Internet, whet investor appetites when it listed on the Frankfurt Stock Exchange last week. Shares in the company rose almost 9% during the first day of trading, giving the Berlin-based takeout company a market cap north of €4.5 billion, underscoring investor interest in these types of businesses.
The sector is however becoming an increasingly crowded space. Most European countries have either a home-grown delivery champion or one of the larger players catering to their market. It’s no stretch to imagine that some of these will either fail or be gobbled up as the largest delivery giants seek to scale their operations.