Delivery Hero Takes Majority Stake In Its Big Rival In Korea, Baedaltong

Delivery Hero, the Berlin-based takeout food delivery company, has made no secret of its appetite to scale up its business in Asia and elsewhere on the heels of its most recent $350 million funding round. Today comes the latest development in that strategy: the company has taken a “substantial” investment in Baedaltong, one of Korea’s biggest food ordering companies.

Niklas Östberg, Delivery Hero’s CEO, would not tell me the exact amount of the investment nor any other financial details, but it sounds like a big enough stake for Delivery Hero to claim some consolidation of the business alongside YoGiYo, its existing operation in Korea.

Delivery Hero was previously the clear leader in online food ordering in Korea,” he says, noting that YoGiYo processes around 1 million orders per month. “With this deal we also become the largest restaurant platform for ‘click to call orders’. We are working on a lot of groundbreaking ideas to make the food ordering even better not only in Korea but globally.”

Nevertheless, the two will continue to be run separately because they have different business models — Baedaltong based around a button to click and call to order; and YoGiYo leaving it all to you clicking in the app or online to do the deed.

Baedaltong gives users a selection of menus from some 150,000 restaurants, with some 11 million people using its apps to order.

Delivery Hero doubling up on business in Korea comes during a period of fast growth in the larger Asian market for the takeout business. It says business — Delivery Hero is also active in China and Australia — has grown by more than 500% this year.

Baedaltong specifically has been on its own growth tear, with net revenues up this year by 258% and net profit up 53% compared to 2013. “We’re very much looking forward to a close, long and mutually beneficial relationship with Baedaltong,” Östberg said in a separate, prepared statement.

It also comes at the same time that a third player has also picked up more funding to capitalise on what appears to be a lot of interest in takeout delivery in the country.

Just weeks ago, Baedal Minjok picked up $36 million led by Goldman Sachs to grow its business in the country as well as expand internationally. Incidentally, it also claims to be the biggest business of its kind in South Korea, with over 140,000 restaurants registered on the platform and 4 million orders processed each month, 99% of which are through its iOS and Android apps.

For that reason, consolidation likely made sense for Baedaltong as well.

“We are very happy to have Delivery Hero on board as an investor. Both companies share the same passion for building a great service,” said Tae-hoon Kim, CEO of Baedaltong, in a statement.

Even more globally, the food delivery space is an ever-interesting field for other e-commerce companies looking for better and greater economies of scale for their existing logistics businesses and relationships with local merchants. Square is now also active in the space by way of its acquisition of Caviar, and Amazon is also kicking off services, starting first in Seattle.