Delivery Hero moves into Asia with Woowa $4bn buyout
Shares of German delivery company rise by 17.8 per cent
Delivery Hero has agreed to buy South Korea’s largest online food delivery service Woowa for $4bn (£3bn, €3.6bn), as it looks to make its mark in Asia.
The German delivery company will take full control of the start-up. However, at the time of the sale it owns up to 88 per cent. The remaining 12 per cent will be held by the Woowa’s management and then converted into Delivery Hero shares over a four-year period, to achieve the 100 per cent ownership.
As part of the transaction, a joint venture will be set up in Singapore, with Woowa founder and CEO Bongjin Kim managing operations and overseeing Delivery Hero’s expansion in Asia Pacific.
“The Korean food delivery market is still in the very early stages of development, and offers vast opportunities to grow the customer base and expand into adjacent on-demand services,” said Bongjin.
“We are excited to partner with Delivery Hero to leverage their platform and global expertise to facilitate expansion in Asia, as well as to further penetrate the high-potential Korean market.”
Founded in 2010, Woowa predominantly operates the app Baemin. In the first three quarters of 2019, the start-up grew revenues in Korea by 84 per cent year-on-year to $366m.
Delivery Hero is the largest global food delivery platform outside of China by number of orders. This sale confirms its “commitment to expand into fast-growing Asia”.
Niklas Östberg CEO of Delivery Hero said: “We are excited to enter into a strategic partnership with the Woowa Brothers, which is at the forefront of innovative technological services and has put Korea on the map in the global online food delivery industry. The joint venture will have the full support of, and access to, Delivery Hero’s global resources.”
At the time of writing Delivery Hero’s shares had risen by 17.8 per cent to €59.10, the highest level since the company’s first public offering in 2017.
FURTHER READING: Blockchain and IoT ‘to save food industry $31bn by 2024’
FURTHER READING: Amazon to launch its first grocery store in Los Angeles