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Amazon invests in Deliveroo

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Amazon is the largest investor in Deliveroo’s latest $575m round of funding, the food delivery business said today. 

Other investors include T Rowe Price, Fidelity Management and Research Company and Greenoaks in a funding round that takes total investment raised to date to $1.53bn.

The money will be used to expand Deliveroo’s tech team at its UK headquarters, and to expand to reach new customers and to continue innovation through its delivery-only super kitchens. It also promises to develop other new formats that help restaurants to expand at a lower cost and lower risk in order to bring more choice to local neighbourhoods. 

Deliveroo was founded in 2013 by William Shu and Greg Orlowski. Today it works with more than 80,000 restaurants and takeaways, and with 60,000 riders working in 500 towns and cites in 14 markets. The company has 2,500 members of staff. 

William 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 creat more flexible, well-paid work for riders.

“Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organistaion. This is great news for the tech and restaurant sectors and it will help to create jobs in all of the countries in which we operate.”

Doug Gurr, Amazon UK country manager, said: “We’re impressed with Deliveroo’s approach and their dedication to providing customer with an ever increasing selection of great restaurants together with convenient delivery options. Will and his team have built an innovative technology and service and we’re excited to see what they do next.”

Commenting, Catherine Shuttleworth, retail analyst and chief executive of creative, retail and shopper marketing agency Savvy, said: “As Amazon take a stake in Deliveroo this morning 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.”

Our view: So why has Amazon, an Elite retailer in IRUK Top500 research, invested in Deliveroo? The move chimes with Amazon’s focus on getting delivery right, by making it ever more convenient for the customer. That’s even more important for food takeaway customers – who want to receive their food fast – as it is for retail customers. Amazon previously ran its own delivery business in this area but has since discontinued the Amazon Restaurant service. Its partnership with Deliveroo gives it a new route into this area of business that’s highly relevant to its own.

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