Uber Is in Early Talks to Buy Europe's Deliveroo
Uber Technologies Inc. is in early talks to buy food-delivery company Deliveroo for several billion dollars, according to people familiar with the plans.
A bid for London-based Deliveroo, last valued at more than $2 billion, would mark a major attempt by Uber to dominate the food-delivery business in Europe. An acquisition price is unknown. Any offer would need to be considerably above its latest valuation, according to people with direct knowledge of Deliveroo plans.
The talks could fall apart, in part because Deliveroo and its investors have been reluctant to relinquish independence, said the people, who asked not to be identified because the information is private. Spokesmen at Deliveroo and Uber declined to comment.
Although little-known in the crowded U.S. market, which it has avoided, Deliveroo is ubiquitous in Europe’s capitals. The service is available in more than 200 cities on four continents.
Shares in rival food delivery companies dropped Friday. Delivery Hero SEfell as much as 2.9 percent in Frankfurt, before recovering and turning positive later in the day, while Just Eat Plc dropped as much as 9 percent in London.
Uber Chief Executive Officer Dara Khosrowshahi has made the company’s food-delivery business a top priority ahead of a planned initial public offering in the second half of 2019. The San Francisco-based company is weighing other acquisitions, too. It’s in talks with Middle Eastern ride-sharing rival Careem, people familiar with the matter have said. After selling its ride-hailing businesses in Southeast Asia, China and Russia, Uber is eager to buy competitors, rather than sell its remaining local businesses.
Deliveroo is one of Europe’s biggest startups and last year raised about $480 million from investors including Fidelity Investments and T. Rowe Price Group Inc. The company competes directly with Uber Eats, Uber’s food delivery business.
Deliveroo was in financing talks last year with SoftBank Group Corp., one of Uber’s major investors. The negotiations abruptly ended after SoftBank concentrated on backing Uber.
If it goes through, the acquisition would be the latest example of a European or Middle Eastern startup falling into foreign hands.
Over the past two years, Apple Inc. acquired music-identification service Shazam for about $400 million, despite initial concern from European regulators; Amazon.com Inc. snapped up Dubai-based online retailer Souq.com for $580 million, shocking locals; and Chinese travel giant Ctrip.com International Ltd. agreed to buy Scottish flight-booking site Skyscanner for $1.7 billion.