Speedy food delivery giant Deliveroo is reportedly set for a potential £2.7bn takeover by its U.S. rival, DoorDash. Launched in 2013, Deliveroo quickly became one of the most recognized brands in the UK startup ecosystem. However, despite the early success and strong brand presence, Deliveroo has faced significant hurdles in recent years. After going public on the London Stock Exchange in 2021 with a £7.6bn valuation, the company struggled to meet expectations, failing to achieve the same level of growth anticipated by investors.
By 2024, Deliveroo’s financial situation had worsened, with losses ballooning to over £30m. However, the company did manage to reverse some of this decline after announcing its first full-year profit just last month, largely driven by a combination of restructuring efforts, including layoffs and the closure of operations in certain international markets.
Now, reports indicate that DoorDash, the California-based food delivery service operating in over 30 countries, is offering £2.7bn to acquire Deliveroo. This proposed bid is a significant reduction from the £7.6bn valuation the company achieved during its 2021 IPO. Should DoorDash proceed with the offer, it has stated it would likely recommend the deal to Deliveroo’s shareholders.
Despite these developments, there is still uncertainty about whether a firm offer will materialize. According to a statement, Deliveroo shareholders are advised to take no action regarding the potential takeover at this stage.
The consumer delivery market, in general, has faced challenges in recent years, with shifts in consumer behavior post-Covid-19 affecting major players like Deliveroo and Just Eat Takeaway. DoorDash has until May 23 to submit a formal bid for Deliveroo under UK competition laws.
