Glovo, one of the leading multi-category delivery players in the world, will acquire Delivery Hero’s operations in the Balkan region for €170M. The Spanish startup will take over foodpanda in Romania and Bulgaria. Donesi in Serbia, Montenegro, Bosnia and Herzegovina, and Pauza in Croatia will also enter Glovo’s portfolio.
The transaction is strategic for both parties, allowing the optimization of operational footprints and the focus on investment in core markets and verticals. At the same time, it starts a process of consolidation in the food delivery markets in the region.
Glovo and Delivery Hero have collaborated on various transactions in the past years. Glovo recently raised €450M in April 2021 in a Series F funding. Delivery Hero also participated as an investor. This was aimed at expanding the company’s footprint and developing its quick commerce division. And just last year, Glovo sold its Latin American operations to Delivery Hero for up to €230M.
Strategic move for Glovo in the Balkan region
With an already strong presence in the Balkan countries, Glovo is well-positioned to continue investing in long-term and sustainable multi-delivery operations here. Through its quick commerce division, the company aims to deliver multi-category consumer goods in under 1 hour. Aside from fresh food, new categories include groceries, pharmaceutical products, and fashion items.
Acquiring foodpanda is a good opportunity at a time when the pandemic has increased the appetite for in-home dining and boosted food delivery services. It is also a strategic move for its quick commerce business. In Romania, foodpanda has a leading position in the food delivery market, planning to reach a total of 60 cities by the end of 2021. But it has also diversified its categories of commercial partners. Its partners have grown 200% in 2020, reaching close to 6000 restaurants and stores.
In Bulgaria, the acquisition will help build the company’s footprint. Glovo has just entered the market in March, starting with Sofia, Plovdiv, and Varna, but plans to expand to 60 cities. Foodpanda already operates in more than 70 cities in the country. In the same attempt to diversify services, the company has recently partnered with Decathlon to include sports items in its delivery platform. To deliver its growth ambitions in the country, Glovo is looking for a leader to build and manage the local team.
“It’s always been central to our long-term strategy to focus on markets where we see clear opportunities to lead and where we can build a sustainable business. Central and Eastern Europe is a very important part of that plan. The region has really embraced on-demand delivery platforms and we’re very excited to be strengthening our presence and increasing our footprint in countries that continue to show enormous potential for growth,” says Oscar Pierre, CEO of Glovo.
As for Delivery Hero, divesting from its food delivery operations in the Balkans will allow the company to focus on its other 50 markets in Europe, Latin America, the Middle East, Asia, and North Africa. Glovo will be better positioned to take over the business in the region and continue to deliver an amazing customer experience, says Niklas Östberg, CEO and Co-Founder of Delivery Hero.