DoorDash to acquire Deliveroo for £2.9b

US food delivery app DoorDash has confirmed the acquisition of Deliveroo for £2.9b.

DoorDash has agreed to pay 180p a share in cash for the London-based company, which was founded in 2013 by William Shu and Greg Orlowski. 

At the time of its fraught flotation on the London Stock Exchange in 2021, Deliveroo had been valued at roughly three times the price, at £7.6b.

Over the past 12 years, Deliveroo has expanded its presence across nine countries such as Belgium, France, Italy and the UAE, all of which are new for its North American owner.

Now, both DoorDash and Deliveroo will have a global presence in over 40 countries in “complementary geographic operations”, DoorDash said.

DoorDash also pointed out the partnership will enable each company to play to their strengths: Deliveroo has a successful track record in targeting cities and large urban centres, while DoorDash has historically leant towards urban, suburban and rural areas.

The deal comes soon after Deliveroo suspended a £100m share buyback programme last month, having just posted a profit for the first time since its founding in 2013.

Tony Xu, chief executive and co-founder of DoorDash, said: “Our mission at DoorDash is to grow and empower local economies. We started the company in 2013 to help people like my mom – people running local businesses and creating the vast majority of jobs and economic activity in our communities. Our focus ever since has been on building the best products and services to enable these merchants to grow, connecting them with consumers in their neighbourhoods, and creating a local commerce platform that offers uniquely flexible earnings opportunities.

“Coming together with teams that have similar visions and values accelerates our work to achieve that mission. Deliveroo is just such a team and one that I have long admired… I could not be more excited by the prospect of what DoorDash and Deliveroo will be able to accomplish together.”

Shu, chief executive and co-founder of Deliveroo, added: “We are now at the beginning of a transformative new chapter. DoorDash and Deliveroo are like-minded organisations with a shared strategic vision and aligned values. Together, we will be even better positioned to serve consumers, merchants, riders and local communities. The Enlarged Group will have the scale to invest in product, technology and the overall consumer value proposition.

“I want to thank all of our incredibly skilled people, dedicated riders and merchants and our loyal consumers for helping us to build the successful business we have today. I hope they share our excitement about what the future holds. I know that DoorDash will be a great long-term partner for our business.”

Claudia Arney, chair of Deliveroo, confirmed the Deliveroo Independent Committee has unanimously decided to recommend this offer to its shareholders and stakeholders.