FINANCE

Amazon hops pond to take on Uber

BY Dan Berthiaume

Amazon is making a major investment in a fast-growing, online British food delivery startup.

The e-tail giant is leading a $575 million Series G funding round in Deliveroo, which has now raised $1.53 billion to date. Launched in 2013, Deliveroo competes in the U.K. with Uber Eats and other on-demand food delivery services. The company also operates in more than 500 towns and cities across 14 markets, including Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, Taiwan, United Arab Emirates, Kuwait, and the United Kingdom.

In addition to providing on-demand online delivery for restaurants, Deliveroo offers services in certain markets such as delivery-only kitchens and consumer storefronts. In December, it opened its first restaurant, in Hong Kong. Called Deliveroo Food Market, the high-tech outpost serves as a kitchen for delivering online orders and as an actual eatery where patrons can choose from 15 dining concepts.

Deliveroo says it will use the new influx of cash from the latest round of funding for projects such as growing its London-based engineering team, expanding its delivery reach and providing new tools for its riders (drivers). The company, which reported year-over-year growth of 116% in 2017, also plans to use the cash to develop new innovations in the food sector and new formats.

“This new investment will help Deliveroo to grow and to offer customers even more choice, tailored to their personal tastes, offer restaurants greater opportunities to grow and expand their businesses, and to create more flexible, well-paid work for riders,” said Will Shu, founder and CEO of Deliveroo. “Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organization.”

The deal is subject to customary closing conditions. According to TechCrunch, Tom Watson, a British member of Parliament and deputy leader of the Labour Party, plans to ask the U.K. Competition and Markets Authority (CMA) to review Amazon’s involvement in the financing. Watson cited concerns over Amazon improperly using customer data or creating unfair competition. The CMA could potentially place restrictions on or even block Amazon’s investment.

The exact amount of Amazon’s investment was not disclosed. Other participants in the funding round were existing investors T. Rowe Price, Fidelity Management and Research Company, and Greenoaks.

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