M & A

Delivery Hero SE: A hot Bet on Growth

To investors, Delivery Hero may look like a good portfolio hedge against COVID effects. The market for food and grocery deliveries still enjoys a boost by the pandemic, and there is no end in sight to this growth spurt yet.

At first glance, this looks like a good fit with the aggressive growth strategy of Delivery Hero. However, less well-meaning viewers call this strategy growth at any price.

Whether you like this or not, mergers and acquisitions competencies are a key factor for this company. In 2021 Delivery Hero significantly expanded its market position in Korea, where it acquired the leading market position via a strategic partnership with Woowa Brothers Corp., while selling its former local subsidiary Delivery Hero Korea LLC (Yogiyo) to a syndicate of institutional investors in October.

The 2021 M&A agenda, however, is much longer. The Turkish subsidiary Yemeksepeti launched a quick commerce platform aiming to deliver anything from local stores and acquired an online shop platform providing local supermarkets with online sales opportunities (Marketyo). In Denmark, Hangry.dk ApS, was taken over, while the takeover of the food delivery and quick commerce business of the multi-category marketplace hugo, strengthens the market position in Central America and Jamaica. On the other hand, Delivery Hero disposed of its businesses in Bosnia Herzegovina, Bulgaria, Montenegro, Romania and Serbia, and certain parts of the Croatian operations.

M&A begins to look like the core business of Delivery Hero. The key question now should be, if this will grow into an integrated group, or should we more of a private equity type company specialized in this market? In this respect, another piece of news seems to be important. This summer, Delivery Hero returned to its home market under the foodpanda brand. Compared to the acquisitions, this may be just an insignificant step. However, it could be the acid test: can you deliver or not?