Cooking up a deal: DoorDash's Europe push is fraught with challenges

DoorDash and Uber Eats are shopping in Europe this summer. While the latter enjoys a sizeable presence on the continent, the former is a relatively new arrival on European shores. Both have signed deals in the food delivery space, which has seen consolidation since the highs of the Covid pandemic.

US-based DoorDash has announced a $3.9 billion deal to acquire UK-based Deliveroo, its first major move in Europe. It had purchased Finnish food and grocery delivery platform Wolt in 2022, but that did nothing in the sense of expanding DoorDash's global presence. DoorDash still holds two-thirds of the food delivery market in the US, and 88% of its revenue last year came from the same market. The Deliveroo acquisition will expand its reach to 40 countries, it has projected.

Meanwhile, in Turkey, Uber Eats agreed to buy 85% of Alibaba Group-led food and grocery delivery platform Trendyol Go. The cash deal, worth $700 million, is expected to be completed in the second half of the year, bolstering Uber's European presence.


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Consolidation galore

The food delivery space has seen acquisitions as demand slowed following highs in the Covid lockdown years. In February, Prosus NV agreed to buy Amsterdam’s Just Eat Takeaway.com NV for €4.1 billion.

Last November, billionaire Marc Lore’s Wonder Group Inc. completed the acquisition of Chicago-based Grubhub from Just Eat Takeaway.com earlier this year for $650 million.

Amazon, which owns a 14% stake in Deliveroo from an investment in 2019, could come up with a counterbid for the food delivery platform, according to a newsletter by The Information.

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Head to head

DoorDash will have a tough road ahead even with Deliveroo in its corner. While it has been focused on the US, Uber and Just Eat Takeaway.com have a strong foothold in Europe.

Uber Eats currently operates in 13 European countries, while Just Eat Takeaway is in 14. On the flipside, Deliveroo operates only in five European markets.

Deliveroo doesn't feature among market leaders either. It lagged both Uber Eats and Just Eat Takeaway in its home market the UK, according to market research firm Yipit. In France, Deliveroo trails Uber Eats, while it has taken the lead in Italy, The Information reported.

However, the consolidation in recent times opens the field for a major name like DoorDash to capture the splintered UK online delivery market, said Mandeep Singh, senior industry analyst at Bloomberg Intelligence.