If this story sounds familiar, it’s because the industry leader DoorDash is reportedly in the process of acquiring its competitor Deliveroo. The deal is worth around £2.9 billion, or nearly $3.29 billion. This smart move gets ahead of the fast-changing food delivery space. Economic headwinds respond to the fierce competition and evolution of consumer habits in a post-pandemic world. The merger would help DoorDash in the UK market, where it already competes and is vying to increase its footprint among other markets.
Deliveroo, another UK-born startup, was founded in 2013 and soon after set itself apart from the competition with the rapid growth of the industry. The company had a record-setting IPO in 2021 coinciding with a takeout boom from pandemic-fueled restrictions on restaurants and dining. Deliveroo, for example, has seen a financial windfall with the increase of online food orders following the pandemic. During the twelve-month period ending in December 2024, the company posted record earnings, exceeding £2 billion. What’s more, Deliveroo accelerated to a gross transaction value of £7.1 billion over the same four-year stretch.
At first, Deliveroo was wildly successful. Since then it has faced serious challenges, most notably from rivals such as Just Eat Takeaway and Uber Eats. Riders are raising the stakes on Deliveroo. Competition is growing fiercer and putting more pressure on Deliveroo. In fact, Deliveroo had to withdraw from the Australian market in 2022, overwhelmed by the intense domestic competition. The move by DoorDash is expected to allow Deliveroo to better address these competitive pressures in the future.
According to industry analysts, DoorDash’s acquisition of Deliveroo could change the game in the UK food delivery market. By combining their resources and expertise, the two companies could potentially enhance customer experience and streamline operations in a rapidly changing market.
