Amazon delivers for Deliveroo in a $575m funding round

Amazon delivers for Deliveroo in a $575m funding round

Amazon has taken the lead on a new $575m funding round for Deliveroo intended to furnish the home delivery service with the capital it needs to expand its tech team, reach more consumers and grow its unique brand of delivery-only ‘dark kitchens’.

The latest cash injection brings the total raised by Deliveroo to $1.53bn as its voracious appetite for new customers, including both signed-up restaurant suppliers and consumers. The former has been bolstered by the development of purpose-built kitchens in areas of high demand from which restaurants can lease cooking facilities at the fraction of the cost of opening a new eaterie.

In a bid to draw in more customers Deliveroo will also develop new products to deliver a more personalised experience.

Will Shu, founder and chief executive of Deliveroo, said: “This new investment will help Deliveroo to grow and to offer customers even more choice, tailored to their personal tastes, offer restaurants greater opportunities to grow and expand their businesses, and to create more flexible, well-paid work for riders.”

Catherine Shuttleworth, CEO at Savvy, said: “… we think this is a really significant step in the UK food market. We know from our stats that 42% of UK shoppers have used an app to order from a food delivery service (such as Just Eat, Deliveroo or Uber Eats). This rises to 74% for those aged 18-35. 12% having specifically used Deliveroo, rising to 28% among 18-34-year-olds.

“In large part, geographic coverage is their main current obstacle to penetration growth and Amazon could offer immediate scale. In perspective, 16% of shoppers have used Amazon Prime Now (1-2 hour delivery service) though not necessarily for food.”

Shuttleworth considers such trends to pose a real and present danger to supermarkets with younger shoppers turning to the likes of Deliveroo for their nightly meal rather than head out to their nearest store - diverting food spend from the pockets of retailers in the process.

Further innovations have seen Deliveroo open an unmanned physical store in Singapore.

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