European Take-Out Wars Continue: Delivery Club Raises $4 Million From Addventure

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The European take-out wars continue to heat up. This time it’s the turn of Russia’s Delivery Club to receive an injection of cash, raising a $4 million second round of funding from existing investor, Addventure. The new capital will be used by the online food ordering service to “boost regional and global expansion”, enabling it to enter additional cites in Russia and to expand into other Central and Eastern European countries.

Competing locally with Team Europe’s Delivery Hero, which itself raised a hefty $50 million Series D in August, Delivery Club says that it currently processes more than 4,000 orders daily (claiming 30% of all online orders in Moscow and Saint Petersburg) and that this is growing 20-30% every month, putting it on track to reach 7,000 daily orders by the end of 2012.

Meanwhile, Delivery Club’s backer, Addventure, is talking up the size of the market for online food ordering in Russia and the surrounding region. Based on its own research, it reckons that Moscow alone is a $700m market opportunity, and that Russia as a whole tops $1 billion. That would seem to paint a similar picture to what we’re seeing right across Europe, hence local competition from $100m-backed Delivery Hero and quite possibly others. Addventure also points out that Delivery Club isn’t just targeting take-outs, but is a marketplace for an array of online food delivery ordering, including groceries, organic food and supplements — setting it apart from those competitors.

Notably, however, the other major European player for online take-outs, Just-Eat, which is backed to the tune of $129.4m, hasn’t yet put down roots in Russia (or anywhere else in Central and Eastern Europe), though it does presently operate in 14 countries, including many in Europe. Given the size of the opportunity, it wouldn’t be a huge surprise to see that change — perhaps even via an acquisition.

On that note — though it doesn’t mention Just-Eat or Delivery Hero explicitly — the official press release announcing Delivery Club’s latest funding round, warns of the challenge faced by outside competitors in the online food ordering space who choose to enter the region.

… many companies, including global players, who enter the market endure failure, while others raise new investments, grow business and cover more and more regions in Russia, CIS and Eastern Europe.

You know what they say, if you can’t stand the heat…