Delivery Hero had initially acquired the stake in Deliveroo in 2021 for approximately £284m. Credit: Ralf Liebhold via Shutterstock.com.

German online food ordering platform Delivery Hero placed 68 million Class A shares in British food ordering online platform Deliveroo with institutional investors in late January 2024, with the sale for settlement on 1 February.

The shares translate to an approximately 4.5% stake and mark Delivery Hero’s exit from the London firm.

Delivery Hero placed the Deliveroo shares at a price of £1.13 ($1.43) per share with institutional investors in an accelerated bookbuilding process.

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This strategic move is in line with Delivery Hero’s commitment to disciplined capital allocation.

Delivery Hero acquired the stake in Deliveroo in 2021 for approximately £284m, when food delivery services were experiencing a surge in demand due to the Covid-19 pandemic. But the sector has since faced challenges such as food inflation and changing economic conditions, leading to a downturn in consumer ordering habits.

Deliveroo’s fourth quarter (Q4) of 2023 earnings report indicated a slight increase in average monthly active consumers, up by 400,000 from the previous quarter. But despite this growth, the year-on-year comparison shows a 2% decline. The company’s revenue remained relatively unchanged at £523m in Q4 2023, compared to £521m in the same period of the previous year.

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Similarly, Just Eat Takeaway reported a 13% decrease in North American orders during Q4 2023, dropping from 77 million in Q4 2023 to 67 million. The company’s gross transaction value also saw a 15% reduction in Q4 2023.

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It was reported in September 2023 that Delivery Hero was in negotiations for a potential sale of its Foodpanda business in select south-east Asian markets including Singapore, the Philippines and Thailand.

In December 2023, Delivery Hero announced plans to shut down its global tech hubs in Turkiye and Taiwan.