Deliveroo has raised $385 million (£285 million) from investors in a huge funding round that values it at over $2 billion (£1.48 billion) and makes it one of the most valuable tech companies in the UK.
News of the funding round was reported by Sky News on Saturday and confirmed by Deliveroo on Sunday.
Total investment in the London-based startup, which employs over 1,000 people worldwide, now stands at around $857 million (£635 million).
The lead investors in the latest round are US fund giants Fidelity and T Rowe Price, which backed companies like Facebook and Snap before they went public. Previous investors DST Global, General Catalyst, Index Ventures, and Accel Partners are also making follow-on investments, increasing their positions in the company.
One big name absent from the list of investors is Japanese tech giant SoftBank, which has raised a $93 billion (£69 billion) tech fund with help from Saudi Arabia’s soverign wealth fund and companies like Apple.
SoftBank was rumoured to be interested in backing Deliveroo in July but a Bloomberg report last week said it withdrew because it was also in talks with Uber about a potential investment. Deliveroo competes with Uber’s food delivery business so it’s possible that SoftBank didn’t want to support a potential competitor.
Founded by former investment banker Will Shu and Greg Orlowski in 2013, Deliveroo’s platform allows people to order food to their homes and offices via an app. The food is delivered by an army of couriers on push bikes or scooters.
Deliveroo operates in over 150 cities across 12 countries, including Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, United Arab Emirates, and the United Kingdom.
The company’s revenues soared 611% to £129 million in 2016, according to filings published on Companies House this week. Losses were up too – a 300% increase to £129 million.
But the company hasn’t always had an easy ride, with UK politicians and unions criticising the way that it treats its couriers.
Deliveroo said it will use the money to expand further, hire more engineers and set up its own kitchens (known as Deliveroo Editions) in each of the countries it operates.
Deliveroo Editions are targeted at restaurants struggling to cope with the increased demand brought about by Deliveroo orders. Deliveroo currently has Editions in London, Brighton, Reading, Leeds, Nottingham, Cambridge, Manchester, Melbourne, Hong Kong, Dubai, Singapore, and Paris.
Will Shu, founder and CEO of Deliveroo, said in a statement:
“I remember how excited I was carrying out our first delivery. I hoped that people would love being able to order great food from their favourite local restaurants straight to their front door. I am proud that just four years on, millions of people use Deliveroo in over 150 cities around the world. This is all thanks to the hard work of our riders, the great restaurants that we work with and our brilliant customers.
“So I am extremely pleased that our new investors share this vision and have decided to make such a significant investment in our future.
“With this funding we will invest further in our delivery-only kitchens Editions, in developing our technology and in taking Deliveroo to more towns and cities. This investment will take us to the next level and allow our riders to deliver ever more great food directly to people’s doors.”
Henry Ellenbogen, portfolio manager at T. Rowe Price New Horizons Fund, said in a statement:
“Deliveroo has built an impressive service that is providing fast delivery of high quality food in over 150 cities across the world. We believe they have a world class team, strong technology capabilities, and the right business model. We are excited to see this capital put to use to build out their Editions concept and expand their geographic footprint.”