Foodpanda, a service owned by Delivery Hero, will be bought by Uber Technologies for $950 million in cash on Tuesday. The deal is part of Uber Eats’ plan to grow in Asia, especially in Taiwan, by making its position stronger there. Also, the sale comes at the same time that Delivery Hero is trying to sell off a bunch of its other businesses in Southeast Asia, which shows that the company is moving away from that market.
Uber is also getting a piece of Delivery Hero as part of the deal. It is going to buy $300 million worth of newly issued regular shares in the German company that delivers food all over the world.
Uber said the deal would be finished in the first half of 2025. It is one of the biggest cross-border purchases to come out of Taiwan.
The statement says that Foodpanda’s local customers, merchants, and delivery companies will be moved to Uber Eats when it shuts down.
Taiwan’s food service market is led by Uber Eats and FoodPanda. According to a new study, Food Panda had 52% of the market from January 2022 to August 2023, while Uber East had 48%. Some other food delivery services, like Foodomo and a bunch of other fast food delivery apps, have market shares of less than 2% and 6%, respectively.
“The market in Taiwan is very competitive, and online food delivery services are still only a small part of the food delivery scene.” “We’re so excited about the chance to give our customers even more convenience and value in the years to come,” said Pierre-Dimitri Gore-Coty, Uber’s senior vice president of delivery.
Uber said that the deal should have regional benefits. It said, “Uber has a wider selection across northern Taiwan and in major urban centers, while Foodpanda is stronger in southern Taiwan and smaller cities.”
Taiwan’s market for online food service will grow from $51.3 million in 2024 to about $68.5 million by 2029.
As a market, food delivery has gone through a lot of ups and downs. Unit economics and the inability to achieve better economies of scale in competitive markets have caused a lot of mergers, with players that used to want to go global now focusing on their home markets for the time being.
When it comes to the “instant grocery” business, this has hurt the most. The billions of dollars that many investors put into startups have been lost as they fail or are bought out by bigger companies, sometimes for very little money. When that happens, the bigger players shrink, like Getir did in April.
Experts at Bernstein say that Taiwan’s “attractive” geography and well-established food delivery business make it a good market for Uber.
Bernstein’s analysts write, “Top-down, GDP/capita levels are good compared to Asia as a whole, and Uber Eats is well positioned.” They also say that Taiwan’s business funnel is especially strong, with an average of seven monthly orders per user, compared to the three to five times that Bernstein usually sees in delivery markets. This also means that it has the most cash bookings for members.
At the same time, Delivery Hero said that it plans to focus its Foodpanda business on other nations.
CEO and co-founder of Delivery Hero Niklas Östberg said, “The strength of our Taiwanese business is a testament to the hard work of many teams over the last eight years.” For us to build the best service in the world, we need to put our resources where we think we can make the biggest difference for customers, suppliers, and riders in other parts of our global footprint. This deal opens up a lot of doors for Foodpanda in Taiwan, and we wish them the best as they move forward.
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Delivery Hero ended talks with an unknown third party in February about the possible sale of Foodpanda in Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar, and Laos. The company was trying to cut back in Asia. In Southeast Asia, Delivery Hero’s food delivery service goes up against Grab. Foodpanda’s plans to sell some of its business fell through after it laid off workers in September to streamline its operations.
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