Speedy food delivery company Deliveroo could soon be acquired by US rival DoorDash, as part of a proposed £2.7bn takeover.
Launched in 2013, Deliveroo boasts some of the best brand recognition of any startup founded in the UK. But the company struggled to live up to the hype after floating on the London Stock Exchange at a £7.6bn valuation in 2021.
By 2024, the company had seen losses widen to more than £30m, although the company regained some ground when it reported its first full-year profit last month, following a series of layoffs and shutdown of operations in some international markets.
Now reports suggest DoorDash, the California-based food delivery company which operates in more than 30 companies, has offered to buy Deliveroo for £2.7bn — a significant markdown on its 2021 IPO valuation.
If DoorDash were to proceed with the bid, however, the company told Reuters it would “be minded to recommend such an offer to Deliveroo shareholders.”
“There can be no certainty that any firm offer for Deliveroo will be made. At this time, shareholders are advised to take no action in respect to the possible offer,” the company added.
The consumer delivery market has taken a battering in recent years, with buyers shifting their purchasing behaviour following the Covid-19 pandemic.
Share prices of listed companies like Deliveroo and Just Eat Takeaway plummeted and the speedy grocery sector collapsed after raising billions of euros from investors.
Under UK competition laws, DoorDash has until May 23 to formally make an offer. Sifted approached DoorDash for comment.
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