Glovo, one of the world’s leading players in multi-category delivery, to acquire Delivery Hero’s operations in the Balkan region For €170M. The Spanish startup will take over foodpanda in Romania and Bulgaria. Donesi in Serbia, Montenegro, Bosnia and Herzegovina and Pauza in Croatia will also enter Glovo’s portfolio.
The transaction is strategic for both parties to optimize operational footprints and focus on investments in core markets and verticals. At the same time, this begins a process of consolidation in food delivery markets in the region.
Glovo and Delivery Hero have collaborated on various transactions over the past few years. Glovo recently €450 million raised in April 2021 in Series F funding. Delivery Hero also participated as an investor. The goal was to expand the company’s presence and grow its fast commerce division. And last year, Glovo sold its operations in Latin America to Delivery Hero for an amount of up to €230 million.
Strategic approach for Glovo in the Balkan region
With an already strong presence in the Balkan countries, Glovo is well positioned to continue investing in long-term, sustainable multiple delivery operations here. Through its rapid commerce division, the company aims to deliver multi-category consumer goods in less than an hour. Besides fresh food, new categories include groceries, pharmaceuticals and fashion.
The acquisition of foodpanda represents a good opportunity at a time when the pandemic has increased the appetite for at-home meals and boosted food delivery services. This is also a strategic move for its fast commerce business. In Romania, foodpanda occupies a leading position in the food delivery market, which plans to reach a total of 60 cities by the end of 2021. But it has also diversified its categories of business partners. Its partners experienced 200% growth in 2020, reaching nearly 6,000 restaurants and stores.
In Bulgaria, the acquisition will help strengthen the company’s presence. Glovo just entered the market in March, starting with Sofia, Plovdiv and Varna, but plans to expand to 60 cities. Foodpanda already operates in more than 70 cities in the country. In the same attempt to diversify services, the company recently in partnership with Decathlon to include sporting goods in its delivery platform. To achieve its growth ambitions in the country, Glovo relies looking for a leader to build and manage the local team.
“It has always been at the heart of our long-term strategy to focus on markets where we see clear opportunities to lead and where we can build a sustainable business. Central and Eastern Europe is a very important part of this plan. The region has really embraced on-demand delivery platforms and we are very excited to strengthen our presence and increase our footprint in countries that continue to show huge growth potential,” says Oscar Pierre, CEO of Glovo.
As for Delivery Hero, divesting its food delivery business in the Balkans will allow the company to focus on its other 50 markets in Europe, Latin America, the Middle East, Asia and North Africa. Glovo will be better positioned to resume operations in the region and continue to provide an incredible customer experience, says Niklas Östberg, CEO and co-founder of Delivery Hero.
