The delivery service Delivery Hero swallows the closest competitor.

The Berlin Dax company is increasing its stake in the delivery app Glovo, founded in 2015, for 780 million euros in shares by 39.4 percent and thus holds more than 80 percent of the shares in the start-up from Barcelona.

This means that Glovo will be valued at a total of 2.3 billion euros, announced Delivery Hero shortly before the turn of the year.

Right from the start, the Spanish company had not only delivered food from restaurants, but also purchases from supermarkets and pharmacies - an area that food delivery services like Delivery Hero also want to penetrate.

"The company offered a multi-category service from the start and thus assumed a pioneering role in the industry," said Delivery Hero boss Niklas Östberg, explaining the increase in the stake.

"A clear focus on the product and rapid implementation have enabled Glovo to take a leading market position in 16 out of 25 countries, even though they started out as their competitors a few years later."

Last year, the 70,000 Glovo couriers increased the volume of goods delivered by 80 percent and generated sales of around 800 million euros.

In Spain, business is on the way to profitability.

Glovo has 15 million users who order at least once a year.

The “Glovo” brand is to be retained

Delivery Hero participated in a € 450 million financing round from Glovo last year and already holds 43.8 percent of the shares.

Now other Glovo shareholders are selling to the Berlin company.

You should initially receive 7.9 million new Delivery Hero shares.

At the closing price on December 30th, they were valued at around 780 million euros.

The remaining Glovo shareholders can also decide whether to sell to Delivery Hero by the end of January.

In addition, the new majority owner has committed to provide Glovo with 250 million euros in fresh money in the new year.

The “Glovo” brand, under which the company offers its services in 1,300 cities in Europe, Asia and Africa, is to be retained.

Delivery Hero and Glovo have already had several dealings with each other: In May, the Berlin-based company sold its business in the Balkans to the Spaniards for 170 million euros.

At that time, Glovo founder Oscar Pierre had assured him that his company wanted to continue to stand on its own two feet.

A merger with Delivery Hero ruled out Pierre.

In autumn 2020 Glovo sold its Latin America business to Delivery Hero for up to 230 million euros.

The food delivery services want to expand their business with delivery services for groceries and other goods.

However, you are faced with many new providers in this area, such as Gorillas or Flink, who have specialized in this area.

They benefit from the fact that more and more people not only have meals delivered from the restaurant, but also order groceries online that should be delivered as quickly as possible.

For this, the delivery services need a complex logistics network - some with their own storage rooms - and as many drivers as possible, who mostly race through the cities on bicycles.