Rocket Internet-backed Berlin headquartered food-delivery company Delivery Hero acquires Korean unicorn peer Woowa Brothers Corp for a whopping US$4B.
As per reports, Delivery Hero will buy 87% stake in Woowa Brothers from its existing investors namely; Goldman Sachs, Sequoia Capital, GIC, and Hillhouse Capital. The remaining 13% will be held by the senior management of Woowa which will be converted to Delivery Hero shares. Woowa Brothers established in 2010 in Seoul, South Korea saw exponential growth in the industry and recently secured investments from global investors worth 320 million USD, thus making it a “unicorn company” in this sector.
“Baedal Minjok”, Woowa’s food delivery service takes over 30 million food delivery orders in a month and boasts of 8 million active monthly users. Woowa expanded into the business of providing shared kitchen space for restaurateurs besides moving into Vietnam. The new joint venture with Delivery Hero will tap into Asia’s booming food delivery market. Woowa’s Kim Bong-Jin, founder and CEO of Woowa Brothers will be the biggest shareholder on the management team and will be in charge of managing the business in South Korea, Hong Kong, and Vietnam. The firm also plans to establish a joint venture in Singapore.
By acquiring Woowa, Delivery Hero expands its presence in the Asian market as Europe becomes more competitive. It is important to note that the German company announced an agreement to buy Gurgaon, India based Zomato’s food delivery business in the UAE through Delivery Hero’s fully owned subsidiary Talabat Middle East Internet Services Company worth around US$172 million. The main aim which is being seen by the Woowa partnership is to leverage and support growth and expansion in Asia.
Delivery Hero with its headquarters in Berlin offers food delivery services to over 400 cities across the globe. With this deal coming through, the shares price of Delivery Hero has seen a significant jump. The company has been seeing growth outside the hyper-competitive food delivery market of Europe. In fact, last year, the sales from North Africa and the Middle East surpassed Europe and accounted for approximately 40% of the revenue. Also, last year Delivery Hero’s German operations were sold to Takeaway.com in exchange for an equity stake in the buyer and also for cash.
According to reports, due to the high smartphone penetration rate, South Korea is the world’s No.4 market for online food orders. In South Korea’s technology sector, this deal is being considered as one of the biggest inbound investments.
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