India witnesses high level of merger and acquisition in online food delivery start-up space
- The M&A deals in the online food delivery business in the 2017 till date is 15 so far
- There were only 28 mergers and acquisitions in this space from 2012 to 2014
- Outside of the US, India has witnessed a particularly high concentration of M&A's in the food delivery space
The merger and acquisition (M&A) activity has been on the rise in online food delivery start-ups. The M&A deals in the online food delivery business in the 2017 till date is 15 so far. While there were only 28 mergers and acquisitions in this space from 2012 to 2014, it has now increased to 41 M&A deals in 2015 and 31 M&As in 2016, according to a CB insights report.
Outside of the US, India has witnessed a particularly high concentration of mergers and acquisitions in the food delivery space, with 6 deals between 2012 and 2017 year-to-date among companies with disclosed funding, said the report.
Source: CB Insights
Among the Indian online food delivery start-ups which took place recently include Zomato's acquisition of Runnr in June this year and Delivery Hero's acquisition of Foodpanda in December 2016. Runnr previously merged with TinyOwl in Q2 2016. Another M&A deal was Nature’s Basket’s acquisition of Ekstop Shop in Q1 2015.
Prominent food delivery players such as UK-based Just Eat and Germany-based foodpanda (recently acquired itself) picked up their pace of acquisitions in the last few years. Of Just Eat’s 13 acquisitions between 2012 and 2016, 10 acquisitions took place in either 2015 or 2016, including that of Spanish online food ordering platform La Nevera Roja. Similarly, 7 of foodpanda’s 10 acquisitions between 2012 and 2016, took place in either 2015 or 2016.
Most recently, Grubhub’s acquisition of Eat24 for $288 million (more than twice the price Yelp paid in 2015) represents a big step towards the delivery giant’s further dominance within the US food delivery space.
Acquisitions of the 2 most well-funded food delivery startups acquired in the past five years both took place within the last year. This includes Germany-based Delivery Hero’s acquisition of global mobile food delivery platform Foodpanda ($310 million in total funding) in Q4 2016, itself one of the most active acquirers in the space, and Lazada’s acquisition of Singapore-based grocery delivery platform RedMart ($58 million in total funding) in Q4 2016.