Food delivery company Deliveroo has raised $385m (£284m) of new funding allowing for future growth. Fidelity and T Rowe Price – previous backers of Facebook, AirBnB and Tesla – has agreed to invest in the company which is now valued at over $2b (£1.48b).
Existing investors DST Global, General Catalyst, Index Ventures, and Accel Partners are also making follow-on investments. The new funding will allow Deliveroo to invest in growth in its Deliveroo’s Editions programme of delivery-only kitchens and its technology team, who will focus on improving Deliveroo’s real-time logistics algorithm and artificial intelligence systems while improving riders’ working experience and continuing to develop Deliveroo’s products for restaurants and consumers.
This will enable Deliveroo to expand in to new towns, cities and countries.
Will Shu, founder and CEO of Deliveroo, said: “I remember how excited I was carrying out our first delivery. I hoped that people would love being able to order great food from their favourite local restaurants straight to their front door. I am proud that just four years on, millions of people use Deliveroo in over 150 cities around the world. This is all thanks to the hard work of our riders, the great restaurants that we work with and our brilliant customers.
“So I am extremely pleased that our new investors share this vision and have decided to make such a significant investment in our future.
“With this funding we will invest further in our delivery-only kitchens Editions, in developing our technology and in taking Deliveroo to more towns and cities. This investment will take us to the next level and allow our riders to deliver ever more great food directly to people’s doors.”
Henry Ellenbogen, portfolio manager at T Rowe Price New Horizons Fund said: “Deliveroo has built an impressive service that is providing fast delivery of high quality food in over 150 cities across the world. We believe they have a world class team, strong technology capabilities, and the right business model. We are excited to see this capital put to use to build out their Editions concept and expand their geographic footprint.”
Last week it was reported that Deliveroo made a loss of $230 m (£129m) in 2016 – up from $ 58m
(£ 30m) in 2015 – as it shelled out for marketing and worldwide expansion costs.
Revenue for the brand was up 611% to $ 229.m (£128.6m) for the year end 31 December 2016 compared to $35m (£18.1m) in 2015 showing increased popularity with customers; however the cost of getting the food to the customer was so high that the company only made a gross profit of just $ 1M ( £1.1meadline).