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Deliveroo on tech investment to drive new business growth

Online food delivery company Deliveroo will use its recent multi-million-pound cash investment to expand its operations and to use technology to meet new customer demands.

Retail giant Amazon was the biggest investor in Deliveroo's latest round of fundraising, which totalled $575 million (£450 million).

“We’re super-excited to have Amazon as an investor,” says Will Shu, co-founder and CEO of Deliveroo. “We want to have a long-term and deep relationship with customers – and we look forward to that relationship flourishing.”

Speaking at Bloomberg’s London tech event, Sooner Than You Think, Shu describes how Deliveroo will use the investment to fund expansion in Britain and abroad. The delivery firm, which has operated in the UK market for six years, currently covers a third of the UK population; by the end of the year, they want to be at 50%.

“We want to go beyond the cities and into the suburbs and smaller towns,” he says. “We think getting great food delivered quickly is a universal problem and we think our approach will resonate with a lot of people.”

Deliveroo Editions

Shu explains that it is crucial Deliveroo continues to build strong relationships with great restaurants in each community. He said new funding will be crucial here, helping the firm to push out its Deliveroo Editions concept, which supports restaurants as they launch delivery services in areas they don't already cover.

“Think of it as a warehouse that’s segmented into 10 different kitchens,” says Shu. “We look at our data, think about what cuisine will be popular in an area and we invite restaurants to take up occupancy. It’s a physical and software layer that allows these restaurants to expand into new areas.”

Competition

Shu recognises Deliveroo faces fierce competition from firms like Just Eat and Uber Eats. He said consumers care primarily about price, selection and service – and Deliveroo must react to demands across these three key factors.

“There’s competition and it’s happening so quickly,” he says. “Being on top and giving restaurants the tools and data to succeed in this new universe is critical. We want to help restaurants reach new customers – and that will be key going forward.”

Shu explains sustained growth takes time and effort, with strong execution plans. While Deliveroo has a strong presence in the UK, it also has a significant hold in France. Italy is the firm’s fastest-growing European market, while the firm is seeing significant levels of online food ordering in Dubai and UAE.

“It’s definitely not a winner-takes-all market, but whoever nails the price, service and selection promise to customers is going to be the party that’s going to succeed. We think about competition all the time and you have to think about all those factors relentlessly.”

Shu also points out how technology will play a key role in helping Deliveroo to analyse customer requirements and to help the business reach new markets. He says the investors supporting the firm are key, although the shape of Amazon’s future input remains uncertain for now.

“We haven’t discussed a lot of partnership angles,” concludes Shu. “They’re really keen to help us build our business, processes and systems. Amazon is one of the best operators in the world. We have access to their senior people and we can learn from what they’ve built in the past 25 years.”

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