It seems investors are falling over themselves to put cash into Deliveroo, the London-based food delivery start-up that launched in 2013. Less than five months after landing $70m (£46m) of funding, the company has just announced a fresh injection of $100m as it gears up for international growth.
Unlike rivals Just Eat and Hungryhouse (owned by German giant Delivery Hero), Deliveroo runs its own fleet of moped- and bicycle-mounted delivery drivers. That’s helped it gain an in with big-name eateries that wouldn’t normally offer delivery, such as Wagamama, Nando’s and even the Michelin-starred Indian restaurant Trishna.
The premium fare has clearly piqued the interest of well-heeled customers too lazy to go out but with a hankering for something a bit more inspiring than a soggy pizza or chicken chow mein. Deliveroo says daily order numbers have increased 500% this year. It already operates in several cities across Europe and today commenced operations in Melbourne, Sydney, Singapore, Hong Kong and Dubai.
‘We’ve experienced extraordinary demand for our service as consumers want high-quality food delivered quickly and restaurants seek a new significant source of revenue,’ said its founder and CEO Will Shu. ‘It’s been phenomenal to see the business quickly expand from London to European capitals and some of the most exciting cities in Asia Pacific and the Middle East.’
Where customers go, investors will follow. This latest pile of cash comes primarily from DST Global, which previously backed Facebook and Twitter and is part-owned by Russian multi-billionaire Alisher Usmanov, and Greenoaks Capital.
There’s no official word on the valuation, but a source told the FT that the deal values Deliveroo at $600m, up from $315m in July and $115m in January. It’s not hard to imagine that Deliveroo will be crowned a ‘unicorn’ (valued at $1bn+) after another round or two.
Such start-ups are so-named because of their mythical counterpart’s rarity, but they’ve become an increasingly common sight on these shores. In the past couple of years we’ve seen several technology start-ups soar past $1bn in the UK, including peer-to-peer lender Funding Circle, fashion ecommerce site Farfetch and currency transfer start-up Transferwise.
To some this boom in valuations is a sign that Britain is finally beginning to punch its weight (unicorns are a dime a dozen across the Atlantic). More cynical observers see another technology bubble akin to the dotcom crash. Deliveroo’s financial performance isn’t in the public domain, so it’s hard to know quite how justified its apparent $600m valuation is. But at this rate it can’t be long before it sprouts a single horn from its forehead.