Rocket Internet, the Berlin-based e-commerce group that went public last year, is making some major consolidation moves in the food delivery business. It has acquired a 30% stake in Delivery Hero (a rival to Rocket’s FoodPanda), and it has purchased the holdings of seven other food delivery companies in Asia, including subsidiaries of two other rivals, JUST EAT and Food Runner, plus two more in Europe.
The new food delivery assets will all become a part of a new division encompassing its on-demand food delivery businesses, creatively called the Global Online Takeaway Group.
The Delivery Hero stake is valued at €496 million ($586 million). Rocket Internet says it is not disclosing the value of the 7 other transactions but they will be treated as part of the FoodPanda brand and JUST EAT India, Food Runner’s Room Service in Malaysia and Singapore, City Delivery (also Food Runner) in the Philippines, EatOye in Pakistan, Koziness in Hong Kong and Food By Phone in Thailand. It has also while acquired two European takeout services: La Nevera Roja (Spain) and Pizzabo (Italy).
All told, Rocket Internet now has food delivery businesses in 39 countries. Not to mention, Rocket Internet just led a $126 million round in HelloFresh.
“With the recent acquisitions foodpanda becomes the market leader across South East Asia,” said Ralf Wenzel, Co-Founder and CEO of foodpanda group, in a statement. “The combined expertise and experience of several great local companies allow us to significantly improve our offering and service to our customers.”
It’s the second major consolidation move in the area of food delivery startups in emerging markets for Rocket Internet, after it swapped holdings for several properties with Delivery Hero in November last year.
This is also Rocket’s second major vertical consolidation, after it put five of its emerging market e-commerce brands into a $3.5 billion group last year.
The German company said in an announcement that companies in the newly founded group cover over 140,000 restaurants across 64 global markets. It claims that, together, they process 78 million orders per month.
Rocket Internet gained notoriety for a perceived policy of ‘cloning’ successful startups in a bid to make a quick buck by selling them later. An IPO in Germany last year left many divided on its future plans, particularly with regard to exiting many of its global ventures — some of which have taken in hundreds of millions of dollars from investors.
The company continues to launch new businesses at a fast rate — including new iterations on the food delivery model (one of the latest: deliveries from farmers’ markets and independent vendors via Bonativo). This second consolidation is a telling indicator of the next stage for the more mature members of its portfolio.
Packaging a range of similar services together potentially turns them into ‘global startup conglomerates’ — pulling them together not only allows the sharing of ideas, information and practices as each company plots continued growth, but it may sweeten their appeal for potential suitors, or possible IPOs.
It also helps Rocket bring together more economies of scale for the collective vertical sector. That will help it compete better against others already active in the same market like JUST EAT, but also prepare it for whatever rival may come along next. Companies like GrubHub have yet to really move outside of the U.S., while Amazon is also among those eyeing up the food delivery market.
As was the case with the creation of the $3.5 billion fashion group — Global Fashion Group (GFG) — it isn’t immediately clear what company could afford, and would pay out, to buy ‘Global Online Takeaway Group’. But, regardless, that is one of Rocket’s newest strategies, so keep your eyes out for future consolidations which cover business niches across a range of global markets.