Just a fortnight ago Delivery Hero, the Berlin-based food ordering company, announced impressive financials to back up a June IPO which made it one of Europe’s hottest ‘unicorn’ tech firms. The company, whose service is available in 40 countries, reported a revenue of €246.5 million ($291.8m) for H1 2017, while its margin on adjusted earnings closed to an 18% loss from 47% in 2016.
That has thrilled investors and the company’s C-suite, who are eyeing rapid international scale to obliterate rival food delivery firms throughout the world. And while South and North America remain among Delivery Hero’s core markets, it is the Middle East that is providing one of the brightest, and most interesting, value propositions.
The Middle East with its very unique culture of favoring delivery services continues to be a key region for Delivery Hero,” the company’s chief strategy officer Ralf Wenzel tells Red Herring. “The recent acquisition of Carriage adds to our range of market leading brands in that region, including Talabat, Hungerstation and Otlob. This set-up and the enhancement of our service build the basis for keeping and expanding our leading market position in the Middle East.”
Delivery Hero acquired Carriage, a Kuwait-based firm working in the Gulf Cooperation Council (GCC) countries of Saudi Arabia, Bahrain, Qatar, Kuwait, the UAE and Oman, in May. And while Delivery Hero’s Americas operation, aided by the success of stable brand Foodora in Canada, has meant that the company’s Americas operation has grown by 117% in the first half of this year, its Middle Eastern business has, meanwhile, increased by 86%.
The latter’s high temperatures and–particularly in the case of the wealthy GCC nations–cash-rich population, make it an ideal region for food delivery disruption. Statista, an analyst, projects the Middle Eastern food delivery market to be worth a little under $4.6bn by 2021.
Back home Delivery Hero, which is part funded by tech giant Rocket Internet, is yet more proof that alongside small and social ventures, Berlin is capable of fostering heavyweight brands. Wenzel, who founded the delivery firm Foodpanda that is now a part of the Delivery Hero group, believes that the German capital’s ability to draw talent away from other cities is its biggest asset.
“The Berlin startup ecosystem was and still is driven by the ability to attract talented people from all over the world,” Wenzel says. “People from all parts of the world are building smaller startups or global companies out of Berlin. Just take Delivery Hero as an example, the company was founded by Niklas Östberg who came from Sweden to Berlin to build a global market leader.”