Germany’s Delivery Hero is set to become Glovo’s main shareholder after agreeing to buy an extra 39.4 percent ownership in the Spanish delivery business, on top of the 44 percent it previously owned. We found out about the agreement during the holidays, but you will be forgiven if you did not hear about it right away – the deal was revealed after 11 p.m. CET on December 31, much to the chagrin of Spanish media. “If they don’t care about their delivery drivers, why should they care about the press?” Michael McLoughlin of El Confidencial ironized on Twitter.
However, let us not allow baseball’s internal politics to get in the way: From a variety of angles, the deal is intriguing news. We’ll take a look at a few of these this morning, including the current state of on-demand startup consolidation, the importance of global development in the two businesses’ markets, and why Glovo didn’t go public as planned.
The delivery Hero has an investor call scheduled for next week, but it was nice enough to send us a brief presentation on the purchase, so we have some more ammunition. Let us get started!
Consolidation on demand, the recent agreement by DoorDash to purchase the food delivery firm Wolt for €7 billion, or roughly $8.1 billion, provides a critical historical backdrop for the Delivery Hero-Glovo deal. Wolt is based in Finland, yet it has a global presence, Wolt “over 4,000 employees across 23 countries,” according to TechCrunch at the time of the DoorDash transaction.
Glovo is also involved in a variety of areas, which it has accomplished in part through acquisitions. In 2021, the firm purchased brands from Delivery Hero, of all companies, when the Spanish company purchased brands from its new parent company for €170 million. The company was, of all things, buying brands from Delivery Hero in 2021, when the Spanish firm purchased brands from its new parent company for 170 million euros, Glovo’s Deal Spree in 2021, however, far from over. Food delivery in Europe was quite competitive in 2021. For the year, Delivery Hero’s stock has dropped around 20%.
