The online marketplace superpower Amazon has this week announced a huge investment in the food delivery service Deliveroo in a move that is expected to significantly boost the company’s cash flow for the next year.
While the exact figure has not been given, reports suggest that Amazon has raised around $575m for the company and will now give the Silicon Valley giant a new stake in the ever-growing Deliveroo.
Many are seeing this huge investment as not only Amazon’s chance to get involved in the highly competitive food delivery market, but to give Deliveroo a whole new standing against its direct competitors, Uber Eats and Just Eat.
Deliveroo, which is one of Europe’s fastest growing technology companies, was founded in 2013 in London, England, and has quickly become one of the market leaders in food delivery services.
The brand operates in over 200 cities across the world, including Hong Kong, UAE, Taiwan, Australia and many countries across Europe.
The company see Amazon’s investment as evolutionary support in international growth.
In fact, CEO Will Shu has stated that he wants to use this money to expand operations to more countries. They also want to invest in their own ‘super kitchens’, to offer more choices and speed up delivery times.
Amazon Try Again
This is not the first time that Amazon has tried to enter the food delivery service.
In 2016 it launched Amazon Restaurants UK in England and Northern Ireland, but the venture was closed after just two years due to disappointing sales.
Now with the full force of Amazon behind them, it’s likely that Deliveroo’s market share will begin to increase, particularly in volatile markets like the United Kingdom.
JustEat, the biggest shareholder in the market, is unlikely to be phased by this new investment.
Despite their share price dropping 8% recently, the company still remains the biggest in the United Kingdom. But many see Amazon’s initial investment as something of a starter – a larger company dipping its toes into the waters of food delivery service before doing something more drastic.
Deliveroo have been going from strength to strength in previous years – with sales doubling in 2017 – and it’s likely Amazon’s influence will only be more positive for their continued growth.