Delivery Hero to acquire South Korean food delivery firm Woowa Brothers for $4b

Rocket Internet-backed Delivery Hero, a Berlin-based online food ordering and delivery platform, has agreed to acquire South Korean peer Woowa Brothers for US$4 billion.

Photo credit: Delivery Hero

The two companies are also set to create a joint venture in Singapore, looking to capitalize on Asia’s burgeoning food delivery market and take on players like Grab, Gojek, and UberEats, Reuters reported, citing a statement from Woowa Brothers.

Delivery Hero already has a presence in the city-state, as it primarily manages the product development for food delivery marketplace Foodpanda Singapore.

Reuters said that the deal comes as Woowa Brothers faces stiff competition from other players in Korea, including SoftBank-backed ecommerce firm Coupang. Uber also recently decided to pull out its restaurant delivery business in the country due to the same reason.

According to data from app analytics firm App Annie, Woowa Brothers-owned Baedal Minjok stands as the biggest food delivery service in Korea, followed by Delivery Hero’s Yogiyo.

Data from Statista showed that revenue in the online food delivery segment in the country amounts to US$2 billion in 2019 and is expected to rise to a little over US$3 billion by 2023.

Delivery Hero will acquire an 87% stake currently held by investors such as Goldman Sachs, GIC, Hillhouse Capital, and Sequoia Capital. The remaining shares, held by Woowa Brothers’ management, will be converted into Delivery Hero stake.

In March, the German company announced an agreement to buy Zomato’s food delivery business in the UAE through Delivery Hero’s fully owned subsidiary Talabat Middle East Internet Services Company. Info Edge, one of Zomato’s largest shareholders, said the acquisition was worth around US$172 million.