Eaten Up: The Consolidation Of The Food Delivery Space In One Timeline

M&A activity among food delivery startups has seen a massive increase in recent years as venture capital funding has declined, and as smaller players in the space seek to be acquired, or risk shutting down. Among all food delivery startups, only 28 mergers or acquisitions took place between 2012 and 2014. This rose to 41 M&As in 2015, 31 in 2016, and 15 so far this year as of 8/7/17.

Prominent food delivery players such as UK-based Just Eat and Germany-based foodpanda (recently acquired itself) picked up their pace of acquisitions in the last few years. Of Just Eat’s 13 acquisitions between 2012 and 2016, 10 acquisitions took place in either 2015 or 2016, including that of Spanish online food ordering platform La Nevera Roja. Similarly, 7 of foodpanda’s 10 acquisitions between 2012 and 2016, took place in either 2015 or 2016.

Most recently, GrubHub’s acquisition of Eat24 for $288M (more than twice the price Yelp paid in 2015) represents a big step towards the delivery giant’s further dominance within the US food delivery space.

We used CB Insights data to create a timeline of food delivery startup M&A activity between 2012 and 2017 YTD. For our graphic, we looked primarily at food delivery startups that had raised disclosed funding and did not limit to first exits only. We also chose to include Eat24’s M&A history, despite its lack of disclosed funding, due to the recency and importance of its latest acquistion by GrubHub. Among this cohort, only 10 mergers or acquisitions (M&As) took place between 2012 and 2014. This jumped to 9 M&As in 2015, 12 in 2016, and 6 so far in 2017.

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, and meal kit services like HelloFresh.

Click the image to enlarge.

Key insights from the infographic above:

• The most well-funded acquirees: Acquisitions of the 2 most well-funded food delivery startups acquired in the past five years both took place within the last year. This includes Germany-based Delivery Hero’s acquisition of global mobile food delivery platform foodpanda ($310M in total funding) in Q4’16, itself one of the most active acquirers in the space, and Lazada’s acquisition of Singapore-based grocery delivery platform RedMart ($58M in total funding) in Q4’16.
• Notable earlier M&As: Although 2015 and 2016 have seen the lion’s share of acquisitions, notable deals involving well-funded companies have taken place in earlier years including Square’s acquisition of Caviar ($17M in total funding) in Q3’14, and GrubHub’s merger with Seamless ($50M in total funding) in Q2’13.
• Diverse acquirers: Acquirers in the food delivery space stretch beyond food delivery itself, into industries including e-commerce, mobile payments, and communication technology. For example, Russia-based communication portal and email service Mail.ru acquired Russia-based online food delivery marketplace Delivery Club in Q4’16.
• Spotlight on India: Outside of the US, India has witnessed a particularly high concentration of mergers and acquisitions in the food delivery space, with 6 deals between 2012 and 2017 year-to-date among companies with disclosed funding. A few of the most significant deals include Runnr’s acquisition by Zomato Media, Runnr’s previous merger with TinyOwl in Q2’16, and Nature’s Basket’s acquisition of Ekstop Shop in Q1’15.

See the full company list below: