Germany-based online delivery service Delivery Hero now owns a 5.1 percent stake in British rival Deliveroo, driving its share price to its highest level since the company went public last spring.
Shares reached 360 pence ($5) after the announcement on Monday (Aug. 9), the highest since they were priced at 390 pence ($5.41) for the initial public offering (IPO) in March.
“Delivery Hero is always looking for new investment opportunities,” the German company said in an announcement about its interest in Deliveroo. “We strongly believe in the future potential of the delivery industry as a whole, and therefore decided to purchase shares in one of the companies that is at its forefront.”
Delivery Hero’s purchase was worth about 284 million pounds ($393.5 million) based on Friday’s closing price. The company has grown into about 50 countries since it was founded in 2011, with the bulk of its business in Asia on the backs of its foodpanda brand. Delivery Hero returned to Germany in May.
The company has not operated in Britain, which is Deliveroo’s largest market, since selling Hungryhouse to Just Eat in 2016. It owns 37 percent of Spain-based Glovo.
Related: UK’s Deliveroo Sees Bright Future, Increases Forecasts For Revenues
Deliveroo operates in 12 markets, including Australia, Belgium, France, Hong Kong and Italy, with the U.K. and Ireland comprising more than half of its orders by value. The company saw an 88 percent increase in quarterly food orders in the second quarter of 2021 and raised its revenue forecast for the year.
Reuters reported that the company now predicts that its gross transaction value (GTV) will grow by 50 to 60 percent in 2021. The earlier forecast called for growth of 30 to 40 percent. GTV is a measure used by eCommerce companies that have a marketplace with multiple sellers. This does not include tips.
The company said that it connects customers with over 115,000 restaurants and grocers in the U.K. and 11 other countries. Amazon-backed Deliveroo has a network of 100,000 drivers.
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