Deliveroo, a British meal delivery firm, has confirmed that it received a buyout proposal from US-based DoorDash.

The proposal, submitted on April 5, offers US$3.6 billion to acquire all of Deliveroo’s shares.

DoorDash has until May 23 to submit a formal bid.

Previous discussions between the two companies took place in June 2024 but ended due to disagreements over valuation.

As of now, DoorDash has not commented on the proposal.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Industry consolidation accelerates as food delivery firms chase elusive profitability

DoorDash’s $3.6 billion offer for Deliveroo reflects a clear trend of consolidation in the food delivery industry, where achieving scale is critical for profitability.

This proposal follows DoorDash’s $8.1 billion acquisition of Finnish platform Wolt three years ago, which expanded its operations to 27 countries and significantly broadened its market reach 1.

Despite the food delivery market more than tripling since 2017 to over $150 billion globally, profitability remains challenging for most platforms. DoorDash’s own COO has described the business as “low-margin and cost-intensive” 2.

Deliveroo only recently reported its first annual profit in 2024 after years of losses, highlighting the financial pressures these companies face despite significant growth 3.

The ongoing consolidation trend shows how food delivery platforms are combining operations to share technology costs, gain negotiating power with restaurants, and expand their customer bases.

2️⃣ DoorDash’s strategic pursuit of international expansion to counter US market saturation

This acquisition bid represents DoorDash’s most aggressive move yet to gain significant European market share, building on its dominant 56% share of the US food delivery market 4.

DoorDash’s CEO Tony Xu has previously noted the company’s limited penetration in European markets, where Deliveroo operates with 180,000 restaurant partners and 140,000 riders across multiple countries 56.

Recent Deliveroo developments