Food delivery startups saw a slight uptick in global deal activity in Q2’16, after deals had plummeted in the first quarter of the year. But funding dropped to the lowest total since Q1’14, meaning investor interest in the category remains depressed.
We define food delivery as companies facilitating the delivery of food to users’ doors, including restaurant delivery, grocery delivery startups like Instacart, farm-to-table services like Door-to-Door Organics, meal delivery startups like Delivery Hero or Sprig, and meal kit services like Blue Apron.
Quarterly food delivery financing trends
The category saw 44 funding rounds in Q2’16, compared to the 41 in Q1’16. That’s still far off the peak in Q4’15 of 76 deals and the overall 2015 rate of 60+ deals in each quarter.
However, the deals in Q2’16 added up to just $320M — a nearly 50% drop from Q1’16, and the lowest funding total since Q1’14.
Q1’16 saw four deals of $50M+ (BigBasket’s $150M Series D, DoorDash’s $127M Series C, Benlai Life’s $70M Series C, and Liquor Easy’s $60M Series B) while Q2’16 saw just two: a $111M Series B to Thrive Market, and a $50M private equity round to Woowa Brothers. Q2’16 also saw a higher proportion of seed/angel deals than Q1’16.
Annual food delivery financing trends
Food delivery financing peaked in 2015 with 99% year-over-year growth in deals and over 180% growth in dollars. A single corporate minority round of $1.2B to Shanghai-based Ele.me, by Alibaba Group and Ant Financial, boosted the year’s funding total. However, deals and dollars still would have skyrocketed without it.
So far this year, food delivery startups have raised $946M across 86 deals. If financings continue at their current rate, sector deals will fall well below last year’s level and dollars may slip below 2014 totals.
Most well-funded VC-backed food delivery startups
Shangai-based restaurant meal delivery service Ele.me tops our list of the most well-funded VC-backed startups, with VC investors including Sequoia Capital China. Berlin-based restaurant delivery service Delivery Hero ranks second, followed by Chinese online grocer Womai. Our list also includes two meal kit services, Berlin-based HelloFresh and New York-based Blue Apron.
Several investors have bet on multiple most well-funded food delivery startups. Rocket Internet and Phenomen Ventures each invested in the German-based trio of Delivery Hero, FoodPanda, and HelloFresh. Hotlzbrinck Ventures and Insight Venture Partners each invested in both Delivery Hero and HelloFresh; Sequoia Capital China’s portfolio includes Ele.me and Jiuxian; and Bessemer Venture Partners has invested multiple rounds into both Blue Apron and BigBasket. See the full list below.
|Most Well-Funded VC-Backed Food Delivery Companies|
|Rank||Company||Total Disclosed Funding ($M)||Select Investors|
|1||Ele.me||$2,335||Alibaba Group, Ant Financial Services, Sequoia Capital China, GSR Ventures, Tencent|
|2||Delivery Hero||$1,330||Kite Ventures, Team Europe Ventures, Holtzbrinck Ventures, Insight Venture Partners, Rocket Internet|
|3||Womai||$320||Baidu, SAIF Partners|
|4||FoodPanda||$318||Rocket Internet, Phenomen Ventures|
|5||HelloFresh||$278||Rocket Internet, Phenomen Ventures, Insight Venture Partners, Holtzbrinck Ventures|
|6||Instacart||$275||Khosla Ventures, Sequoia Capital, Andreessen Horowitz, Kleiner Perkins Caufield & Byers|
|7||Jiuxian||$249||Sequioa Capital China, Oriental Fortune Capital|
|8||BigBasket||$246||Bessemer Venture Partners, Ascent Capital|
|9||Deliveroo||$200||Index Ventures, Accel Partners, Hoxton Ventures|
|10||Blue Apron||$193||Bessemer Venture Partners, First Round Capital, BoxGroup|
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