Amazon Invests $575 Million in Deliveroo Food Delivery

The London-based food delivery service has raised $1.53 billion to date.

Subscription News: Amazon Invests $575 Million in Deliveroo Food Delivery

Source: Deliveroo

Amazon made headlines last week when it made a $575 million investment in Deliveroo, a London-based food delivery service. Amazon was the lead investor in Deliveroos Series G funding round, joining existing investors T. Rowe Price, Fidelity Management and Research Company and Greenoaks Capital. The Series G round brings total raised to date to $1.53 billion. A current valuation has not been calculated, but after Deliveroos last funding round in September 2017, the company was valued at $2 billion, reports Forbes.

In aMay 17 news release, Deliveroo said it will use the funding to grow its engineering team in London, expand its delivery to reach new customers, continue innovating in the food sector, including through its delivery-only Editions super kitchens, and expand product delivery for a personalized customer experience, additional support for restaurants and new tools to offer riders more flexible, well-paid work opportunities.

This new investment will help Deliveroo to grow and to offer customers even more choice, tailored to their personal tastes, offer restaurants greater opportunities to grow and expand their businesses, and to create more flexible, well-paid work for riders, said Will Shu, co-founder and CEO of Deliveroo. Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organization.

Subscription News: Amazon Invests $575 Million in Deliveroo Food Delivery

Source: Deliveroo

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Doug Gurr, Amazon UK country manager, also commented on Amazons investment.

Subscription News: Amazon Invests $575 Million in Deliveroo Food Delivery

Source: Amazon

We’re impressed with Deliveroo’s approach, and their dedication to providing customers with an ever-increasing selection of great restaurants along with convenient delivery options. Will and his team have built an innovative technology and service, and were excited to see what they do next.

Deliveroo was founded in 2013 by Shu and Greg Orlowski. Deliveroo partners with more than 80,000 restaurants and takeaways and with 60,000 riders to provide food delivery service in 500 cities and towns across 14 markets. Deliveroo operations in the United Kingdom, Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, Taiwan, United Arab Emirates and Kuwait. Deliveroo has about 2,500 employees around the world.

Customers can order meal delivery online or through Deliveroos iOS or Android apps. They input their post code to find restaurants that delivery in their area, place their order and a Deliveroo rider will deliver their meal. Deliveroo does not accept cash, only cards, and tipping is optional. Deliveroo says 100% of their tips go to the riders.

For frequent customers who want to save on delivery fees, Deliveroo offers Deliveroo Plus, a subscription membership plan. Customers pay a flat monthly fee for unlimited, free delivery. They also receive exclusive restaurant offers not available to other customers. Deliveroo Plus is designed for use by individuals. It is not for use by businesses or for sharing with other customers.

So how does such an investment benefit Amazon? TechCrunch reports that Amazon closed its competing delivery service, Amazon Restaurants UK, last year because of the competition from Deliveroo and Uber Eats in the UK. TechCrunch speculates that Amazon could potentially leverage its investment into a partnership with Deliveroo, perhaps offering it as a benefit of an Amazon Prime membership.

Insider Take:

This is a strategic investment on Amazons part, but it isnt clear what the motivation behind the investment is – whether it is to simply take advantage of an opportunity to line Amazons coffers with the success of a food delivery start-up or whether it is a chance for Amazon to compete in some way with food delivery services in the U.K. Jeff Bezos does not do anything without a solid business reason; we just dont know what it is yet. Regardless, Deliveroo seems to be on an upward trajectory and Amazon is along for the ride.