Deliveroo Expansion Triggers Big Revenue Growth, Losses

Food delivery company Deliveroo saw huge revenue growth in 2018, but its losses also grew as it expanded and poured money into new areas and ventures in the highly competitive food delivery market.

The company’s revenues went up 72 percent in 2018, according to a report by the Financial Times, but it saw its operating expenses increase £349.4 million in 2018, up from £106m a year before.

The company, which is one of the fastest-growing in Europe, expanded into Taiwan and Kuwait, as well as 250 other cities. Deliveroo has also been introducing new services like Marketplace+, which allows restaurants to deliver their own food.

All of the investments in Deliveroo’s business helped to push worldwide sales to £476 million, but the company’s pre-tax losses grew 16.6 percent to £232 million, up from £199 million in 2017.

The company made the strategic decision to exit Germany in August, signaling that it felt it couldn’t compete with competitor Takeaway.com in the market. Takeaway.com agreed to merge with Just Eat, and that new company became the largest delivery service outside of China.

In May, Deliveroo raised $575 million in a funding round led by Amazon, with T Rowe Price, Fidelity and Greenoaks all participating. Deliveroo has raised $1.53 billion so far, and the U.K.’s competition authority recently stopped it from integrating any further with Amazon.

The company said it was going to use the money to “grow Deliveroo’s tech team, expand the company’s reach to new customers, develop new innovations in the food delivery sector and increase support for restaurant partners and riders.”

Deliveroo was previously in talks with Uber, but those didn’t go anywhere.

“We’re focused on our mission of becoming the definitive food company, and we’ve continued to invest heavily in expansion, technology and new products to meet this ambition,” said Will Shu, Deliveroo’s co-founder and chief executive. “We are leading the field in innovation in food delivery, helping our restaurant partners to boost their sales and providing more well-paid work for riders.”