Uber’s attempt to buy Deliveroo has stalled

Uber’s attempt to buy Deliveroo has stalled because the two sides are “miles apart” on a valuation for the food delivery service… The ride-hailing app is keen to buy or invest in Deliveroo, one of the UK’s biggest tech success stories, but a recent offer for the company valued it at less than $2 billion while Deliveroo has pegged its value at $4 billion… It was reported in September that Uber had held early-stage talks to acquire or invest in the London-based start-up, as it expands its Uber Eats arm… Deliveroo’s main investors, which include Fidelity and T Rowe Price, are seeking an investment or partnership rather than a full sale… . Deliveroo is one of Europe’s best-funded start-ups and has ploughed millions of dollars into differentiating itself from rivals, including by building industrial kitchens for restaurants to use as hubs for orders. Uber Eats launched similar “virtual kitchens” more than a year ago. Deliveroo does not operate in the US, and would offer Uber a chance to expand in Europe, which has emerged as a bright spot for food delivery. Deliveroo’s revenues more than doubled to £277 million in 2017… but losses widened 43 per cent to £185 million after it spent money recruiting 300 engineers, launching in new cities and opening kitchens.

Matthew Garrahan and Aliya Ram