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Derviroo, a London-listed food delivery company valued in London at £7.6 billion in 2021, is set to become the latest British company to be swallowed up by US rivals after San Francisco-based Doordash designated a £2.7 billion bid.
The acquisition talk between the two popular takeout apps occurs when integration gathers pace in the sector. Earlier this year, Prosus signed a 4.1 billion euro contract to acquire Europe’s leading food delivery group Private Eat Eat Eat Takeaway.
Founded by Will Shu in 2013, Derveoo was published four years ago at a hotly anticipated IPO. However, the listing proved to be a catastrophe as the stock lost more than a quarter of their value on the first day of trading.
Since then, the company has struggled to perform. The shares fell more than 60% at a listing price of £3.90 at £1.47 in the market closure on Friday. When Uber Eats launched in the UK in 2016, competition was rampant with retail giant Amazon, which began delivering grocery products that year.
Derveoo said in a statement Friday that its board would “be careful to recommend” a Doordash offer of £1.80 per share if a solid approach is taken.
Deliraloo runs a food delivery app in nine countries and booked its first annual profits in 2024 results last month.
In February, Derveroo was forced to deny speculation that Shu was set to resign as CEO this year, adding that he is “focused on the company’s long-term future.”
Co-founded by Tony XU in 2013, Doordash operates in more than 30 countries and recorded revenue of $10.7 billion last year. A company spokesman declined to comment.
Doordash took the Deliveroo approach last summer with roughly the same rating, according to someone with knowledge of trading. The company will continue to discuss and due diligence, but there is no guarantee that the contract added to its statement will be realized.
Offers from Doordash Values will deliver stocks in the stock at a premium of 20% or more until closing price on Friday. The company must make an offer by May 23 under the UK acquisition rules.
Doordash operates in the US, Canada, Australia and New Zealand and, according to people with consultation knowledge, it does not overlap with the Derveroo market, which companies hope to hope that transactions will not be blocked by competition regulators.
The companies are expanding to food and retail offerings while developing advertising businesses to increase profitability.
