Amazon rides in with huge stage in food-delivery app Deliveroo

deliveroo

Amazon has invested hundreds of millions of pounds in the British food delivery app Deliveroo.

The giant online retailer has led a $575 million (£459 million) fundraising round alongside existing investors T Rowe Price, Fidelity, and Greenoaks.

Will Shu, founder and chief executive of Deliveroo, said: “This new investment will help Deliveroo to grow and to offer customers even more choice, tailored to their personal tastes, offer restaurants greater opportunities to grow and expand their businesses, and to create more flexible, well-paid work for riders.”

London-based Deliveroo has come under fire for refusing to treat its delivery riders as employees and in 2017 it overhauled its “supplier agreement” with them after a scathing report on the “gig economy” by MPs.

Deliveroo was launched in 2013 by Mr Shu and Greg Orlowski, two American entrepreneurs. It operates in more than 100 towns and cities across Britain with 15,000 riders delivering for more than 8,000 restaurants, including Byron, Pizza Express, Rossopomodoro and Wagamama. It also operates in thirteen other countries.

Amazon, the world’s largest internet business with a market value of almost $940 billion, is expanding its food business rapidly. In 2016 it launched its own restaurant delivery service, Amazon Restaurants, and in 2017 it bought Whole Foods, the upmarket organic grocer, for $13.7 billion. Its investment in Deliveroo was first revealed by Sky News last night.

Doug Gurr, Amazon UK Country manager, said today: “We’re impressed with Deliveroo’s approach, and their dedication to providing customers with an ever increasing selection of great restaurants along with convenient delivery options. Will and his team have built an innovative technology and service, and we’re excited to see what they do next.”

The financing round takes the amount of capital invested in Deliveroo since its founding to $1.54 billion. Its revenues more than doubled in 2017; pre-tax losses widened to almost £185 million.

It was reported last year that Amazon had made two preliminary approaches to Deliveroo and Mr Shu has previously stated his ambition to become “the world’s definitive food company”.

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