Uber In Talks To Buy Deliveroo As It Focuses On Food Delivery

Uber Technologies, the ride-hailing company, is reportedly in early-stage talks to acquire Deliveroo, the food delivery company.

Bloomberg, citing people familiar with the plans, reported the deal could be worth several billion dollars. Deliveroo, which is based in the U.K., was most recently valued at greater than $2 billion, noted Bloomberg. Acquiring the startup would be a big effort on the part of Uber to lead in the food delivery market in Europe. Any offer, noted Bloomberg, would have to be a lot higher than Deliveroo’s latest valuation. Bloomberg warned talks could come unhinged in part because in the past Deliveroo and investors in the company haven’t been keen on giving up the company’s independence. Deliveroo is the leading food delivery company in Europe and is in more than 200 cites.

Bloomberg noted Uber is looking at other acquisitions and is holding discussions with Careem, the ride-hailing business that has operations in Southeast Asia, China, and Russia. Last year Deliveroo raised $480 million in venture funding from investors that included Fidelity Investments and T. Rowe Price.

Acquiring Deliveroo would make sense for Uber given the fact that new chief executive Dara Khosrowshahi is making food delivery a top business focus as it gears up for an initial public offering, reported Bloomberg. That is expected to happen in the second half of next year.

In July Deliveroo, which is locked in a cutthroat battle with rival Just Eat, announced it would let restaurants use their riders for orders that are placed through its food app. Reuters, citing comments Deliveroo co-founder and chief executive Will Shu made to reporters at the time, reported that the change — which Deliveroo dubbed Marketplace+ and launched in July — is aimed at boosting the number of restaurants from 10,000 to 15,000 by the end of 2018. What’s more, Reuters noted thousands more riders are likely to join as a result of the new service.