Minutes before the chimes that marked the beginning of 2022, the co-founder and CEO of , Niklas Ostberg He posted that he would “join forces with Delivery Hero.” A little over half a year later, the closing of the sale has finally been announced through stock exchange, although the framework in which it is done has changed drastically. The Glovo’s current valuation has dropped by 65% with respect to the moment in which the purchase agreement was made, going from 2,300 million euros to being in less than 800 million euros.
This is because the purchase of the company by Delivery Hero was made with the payment of shares Of the same. And in recent months, the German firm has suffered a drastic drop in the valuation of its shares, which They went from trading around €98 at the beginning of the year to being worth only €35.10 currently.
A price change that had not been contemplated
Although this turn of events did not affect the official closing of the purchase, it has caused a strong blow to Glovo’s shareholders, since in the initial contract No clauses were included to protect the interests of the delivery company in situations like this.. Now, it is in the hands of the owners of the shares the choice to sell them or wait for an unexpected comeback. On the other hand, Delivery Hero must still carry out the capital increase to carry out the payment.
This operation means that the German Delivery Hero, which already owned around 44% of the Spanish Glovo, after different participations in its latest investment rounds, will now become owns 94% of the company. The remaining 6% will remain in the hands of oscar peter, founder of Glovo, and other minority shareholders. Likewise, Delivery Hero has once again affirmed that it will respect the Glovo brand, so that it continues to operate under this name.
A highly complementary operation
Relations between Glovo and Delivery Hero had been very close for years. Although born from different approaches, their approaches are currently very similar. Delivery Hero, which was born earlier, in 2011, had always had its focus on home delivery, specifically food. Glovo, born in Barcelona in 2015, was already created with a more multidisciplinary intention, to take home any type of errand, although the food category was quite relevant on a day-to-day basis, due to its high recurrence potential. In practice, both are strategically moving towards a last-yard distribution model with the intention of becoming the referents of the concept of quick tradefast deliveries in less than half an hour.
Their good relations had allowed them to generate various agreements in recent years. In 2020, Glovo sold Delivery Hero its in an operation valued at 230 million euros and that covered the Latin American markets in which it had a presence: Argentina, Peru, Ecuador, Panama, Costa Rica, Honduras, Guatemala and the Dominican Republic. In 2021, however, Glovo bought several from Delivery Hero, in a share valued at about 170 million euros.
This meant that at the beginning of 2022 the photo of competition between both companies was a fairly healthy and complementary map. Delivery Hero showed a leadership position in markets such as the Nordics, Latin America, the Middle East and Southeast Asia, while Glovo had focused on southern Europe, and emerging countries in Eastern Europe and the African continent.
A delivery giant
Together, Delivery Hero and Glovo serve a total population of 2.2 billion people (1,500, Delivery Hero; 700, Glovo). Among the criteria that have led to this purchase operation being executed, Delivery Hero highlighted at the beginning of the year:
- Market Complementarity
- Strong leadership position: Not only does it have a presence, but Glovo is the leading app in 16 of the 25 markets in which it is present.
- Shared business vision: They had been working together for 3 years, there is a cultural connection and Delivery hero especially valued the passion and innovation of Glovo’s management team, oriented towards a high quality product and great business execution.
- Multi-category service: one of the weaknesses of Delivery Hero, which therefore saw as very positive that Glovo was born already oriented to more categories than food, with its own technology and high orientation to quick commerce.
- High organic growth: of more than 80% in 2021 compared to 2020. They valued in Glovo its experience and its potential to maintain high growth rates for several years, since several of the countries in which they operate are countries with a low level of digital maturity.
- Clear path to profitability: They saw it as positive that not only did they offer billing growth data, but that future profits in Spain were seen as viable.
Niklas Ostberg, the CEO of Delivery Hero confirmed when the news was released that “they would continue to bet on the Glovo team and product” and that he sees “many opportunities for improvement by combining their resources and experience.” The CEO of Glovo, Oscar Pierrefor his part, declared himself “happy to have found a partner who matches our ambition, our culture, and who will continue to support this adventure”.
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