Deliveroo, the London headquartered restaurant food delivery startup, has raised $385 million in new funding, giving it a valuation of "over $2 billion," according to the company.
The Series E round is led by U.S. fund managers T. Rowe Price, and Fidelity -- who have previously backed the likes of Facebook, AirBnB and Tesla -- with existing investors DST Global, General Catalyst, Index Ventures, and Accel Partners also following on. Total funding for the European unicorn now sits at $860 million.
The new capital will be used by Deliveroo to invest in three aspects of its business:
The first is expansion of its "Editions" (previously called RooBox) programme, which sees it open delivery-only kitchens to enable partner restaurants to expand without any of the traditional upfront costs, whilst increasing food selection for customers and optimising delivery times.
Second, the company plans to continue to grow the size of its technology team who, amongst other things, work on Deliveroo’s "real-time logistics algorithm and artificial intelligence systems" to help improve the speed and number of deliveries that can be made in order to increase what are otherwise very thin margins for on-demand food delivery. Another aspect to its data science is working out where it should launch the next Editions kitchens and what type of food is in demand locally.
Thirdly, Deliveroo says it wants to rapidly expand into new towns, cities and countries. "This will allow more people to order great food quickly to their door from their favourite local restaurants," says the company.
Will Shu, founder and CEO of Deliveroo, said in a statement:
“I remember how excited I was carrying out our first delivery. I hoped that people would love being able to order great food from their favourite local restaurants straight to their front door. I am proud that just four years on, millions of people use Deliveroo in over 150 cities around the world. This is all thanks to the hard work of our riders, the great restaurants that we work with and our brilliant customers.
So I am extremely pleased that our new investors share this vision and have decided to make such a significant investment in our future.
With this funding we will invest further in our delivery-only kitchens Editions, in developing our technology and in taking Deliveroo to more towns and cities. This investment will take us to the next level and allow our riders to deliver ever more great food directly to people’s doors.”
Meanwhile, the company's accounts for year ending 2016 were recently filed, and although they are obviously already 9 months out of date, make for interesting reading. As Business Insider reports, Deliveroo grew a lot that year, with revenue up 611 per cent to £129 million. But losses were up too — a 300 per cent increase to £129 million. However, the figure to really watch is the food delivery company's gross margin percentage, which sat at just 0.7 per cent.