The US delivery service DoorDash is expanding into Europe with the takeover of Finnish competitor Wolt. For Wolt, which delivers food to the door of the apartment in major cities in 23 European countries, the Americans pay with a share package worth around 7 billion euros. DoorDash is entering a market with intense competition, for whose sovereignty European giants such as the Berlin startup Gorillas or the Dutch company Just Eat Takeaway (Lieferando) are fighting.
The previous Wolt boss and co-founder Miki Kuusi will manage the international business for DoorDash, as the companies announced on Wednesday night. The deal is expected to take place in the first half of 2022. DoorDash’s shares rose by a good 19 percent in after-hours US trading after the deal and the quarterly figures were announced.
Jump to Europe
DoorDash has so far been mainly active in the home market of the USA as well as in Canada and Australia. In the USA, the company is considered to be the market leader, ahead of competitors such as Uber Eats or the company Grubhub, which was taken over by Just Eat Takeaway. In the past quarter, the company increased revenue 45 percent year-over-year to $ 1.275 billion, while its loss rose from $ 43 million to $ 101 million.
DoorDash’s ambitions in Europe have been speculated for months. The US company recently participated in a financing round for the Berlin food supplier Flink. With Wolt, DoorDash gains access to the German market. Otherwise, the Finns are predominantly present in Northern and Eastern Europe; Great Britain and important southern European countries are missing. Wolt has around 4,000 employees and, with 2.5 million active users, made a loss of 38 million euros on sales of 285 million euros last year.
In Europe, the Dutch company Just Eat Takeaway (Lieferando) is particularly strong in the delivery of restaurant food. After Delivery Hero had sold its German business to the Dutch and competitors like Deliveroo disappeared, Takeaway with the Lieferando brand was the only delivery service in large cities like Berlin for a while. Uber Eats is now also involved in German business.
Working conditions in view
Wolt started with the promise to pay his delivery drivers fairly. With the increasing competition for workers, the working conditions of the delivery startups come into focus. The fact that open-ended contracts are already considered progress indicates the precarious conditions in the industry. The delivery boom is literally taking place on the back of the often foreign drivers.
The business with the delivery of ready-made meals and groceries has received a strong boost in the corona pandemic and continues despite restaurants that have reopened. Various companies are pushing into the market with investors behind them and are fighting for supremacy. The Delivery Hero, which is now listed in the Dax, is sending its food pandas back into the race against the gorillas. Flink and Getir also want their piece of the delivery cake.
There are more takeovers. Just Eat Takeaway turned over a good seven billion US dollars for Grubhub last year, while Uber bought the Postmates delivery service for more than 2.5 billion US dollars. The logic behind it: the winner takes everything. Because the margins in the delivery business are wafer-thin – especially with food. Investors want to see returns at some point, so the crowd has to do it. There should be less space for the needs of the driver.
(vbr)
