Hungry for break-even: Delivery Hero raises $30m Series D led by Russian VC Phenomen

Delivery Hero
Delivery Hero

Delivery Hero
Berlin-headquartered food ordering platform Delivery Hero has raised a $30m Series D round led by new Russian VC Phenomen Ventures – also an investor in competitor Foodpanda – as it aims for break-even across 14 markets this year.

Delivery Hero, founded about two years ago, offers online food ordering services in 14 countries, mostly in Europe but also including Australia, South Korea, China, India and Mexico. Like rivals JustEat and Foodpanda, Delivery Hero takes a cut of purchases made through its web and mobile apps in exchange for bringing millions of orders per month to tens of thousands of partner restaurants.

Niklas Östberg

“We are at profitability in core markets and will break even this year,” Delivery Hero CEO Niklas Östberg confirmed today. The company currently claims over $400m in annual turnover, about 600 employees worldwide (half of those in Berlin), and the top market spot in six of its markets: Sweden, Austria, Finland, Germany, Poland and Mexico.

It’s about time for some consolidation. As Östberg (pictured above) put it: “We’ve done in two years what most companies have done in ten years.” The company said it would use the new funding to build top technology and strengthen its position in existing markets.

New investor Phenomen Ventures – established by experienced Russian investor Dmitry Falkovich in 2012 and with about $300m in committed funds – is best-known for multi-million dollar investments in established companies Fab, Hailo and OneTwoTrip.

It’s also a major investor in Rocket Internet’s Foodpanda, which is active in close to 30 countries and competes with Delivery Hero in Mexico, Poland, India and Russia. Are we about to see some co-operation between the two rivals? “We don’t see any connection there really,” Östberg said. “We don’t have a lot of overlap in markets.” He added that the biggest competition for the company in all markets is still phone ordering.

The new funding takes Delivery Hero to $116m in equity-based funding since launch plus $10m in venture debt. The round announced today is supported by its existing investors, who include Berlin-based company builder Team Europe (an investor in VentureVillage’s parent company Vertical Media), Kite Ventures, ru-Net, Tengelmann Ventures, Holtzbrinck Ventures, Point Nine Capital and Kreos Capital.

Image credit: pizza: Flickr user wendalicious

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