DoorDash Takes Over Deliveroo in $759 Million IPO Amidst Pandemic Boom in Food and Grocery Delivery Services

Food delivery platform Deliveroo has agreed to be taken over by US rival DoorDash in a deal that values the London-based company at about $5.4 billion, the companies announced Thursday.

DoorDash will pay 180 pence per share in cash for Deliveroo, representing a 44% premium to the closing price of 125 pence on April 4, the day before the US group made its offer.

The acquisition will give DoorDash access to nine new markets across Europe, Asia and the Middle East and around 7 million monthly active users. Together, the combined group will be present in over 40 countries, serving approximately 50 million monthly active users.

The deal comes just months after investment group Prosus agreed a EUR 4.1 billion takeover of Amsterdam-based Just Eat Takeaway.

In addition to the Deliveroo takeover, DoorDash on Thursday agreed to a $1.2 billion deal for New York-based hospitality technology provider SevenRooms.

DoorDash also released its Q1 2025 results with revenue for the quarter reaching $3 billion, up from $2.5 billion for the same period in 2024. Net income stands at $193 million compared to a loss of $23 million in Q1 2024.

“We are excited to welcome the Deliveroo team to DoorDash as we continue to expand our global footprint and strengthen our leadership position in the rapidly growing on-demand food delivery market,” said Eric Gonzalez, chief executive of DoorDash.

“Both companies share a commitment to providing customers with the best possible selection, convenience and value, and we look forward to integrating Deliveroo's technology and operations to create even better experiences for customers and restaurant partners.”

The deal, which is expected to close in the second half of 2025, still needs to be approved by Deliveroo's shareholders.

Deliveroo shares, which have more than halved since the company's initial public offering in 2021, soared as much as 76% in early London trading on Thursday.

"This transaction is a testament to the outstanding team at Deliveroo and the value we have created together over the past eight years," said William Shu, founder and chief executive of Deliveroo.

"It will provide our shareholders with a substantial and immediate premium and is a natural progression for the business as we continue to grow and expand in the global food delivery market."

The merger will create a food delivery behemoth with a market capitalisation of around $22 billion.

It will also give DoorDash a foothold in some of the world's largest and most competitive food delivery markets, such as France, Germany, Italy and Spain.

"The combination of DoorDash and Deliveroo will be a powerhouse in the global food delivery industry," said one analyst.

"It will have the scale, technology and brand recognition to compete with the best in the world."

However, some consumer groups have expressed concern about the merger, arguing that it could lead to higher prices and reduced choice for consumers.

"We urge the relevant authorities to carefully scrutinise this merger to ensure that it does not harm consumers or workers," said one consumer group spokesperson.

The merger is also likely to face scrutiny from regulators over DoorDash's dual-class share structure, which grants founders outsized voting power despite a minor equity stake.

Despite recent reports that founders were planning to sell their shares and relinquish voting control, no official announcements have been made.

Earlier this year, Deliveroo announced its first full-year profit, reporting a net profit of £3 million for 2024, compared to a £32 million loss in 2023. The company also reported a 20% increase in annual revenue, reaching £3 billion.

In March, Deliveroo also reported a 16% rise in fourth-quarter revenue, which came in at £784.8 million, and a 14% increase in gross transactional value to £3.1 billion.

The company's shares had plunged by as much as 30% in its public debut, making it the UK's worst IPO in a decade in terms of market cap. At the time, it was the biggest in the UK in a decade, reaching around £7.59 billion.

Trading quickly turned sour as controversies over worker pay and its dual-class share structure caused the shares to plummet.

As the demand for delivery services tapered off after the pandemic, Deliveroo's share price failed to recover and has more than halved since its IPO.

DoorDash, meanwhile, has seen its share price climb by over 12% since its USD 3.4 billion listing in 2020.

Earlier this year, DoorDash also announced layoffs as part of its mission to cut costs.

In February, the company announced plans to shut down