Less than a year after €80 million, the online food company based in Madrid has been sold again. Just Eat has been in charge of the purchase of La Nevera Roja. The operation, made public in an official company statement on the London Stock Exchange, is valued at 125 million euros, and includes the acquisition of 100% of Hellofood, Hellofood Mexico and the Italian PizzaBo.
The background of the purchase of La Nevera Roja
In January of this year we told you that Just Eat would take over the company which was founded by José del Barrio and Iñigo Juantegui, becoming a ‘de facto’ monopoly of home food deliveries in Spain with approximately 6 million deliveries per year. Although I understand that the purchase of the Red Fridge will close soon, the Berlin giant is waiting to close the sale of other business units at his Global Online Takeaway Group to make an official announcement.
Shortly after publishing this news, the CEO of La Nevera Roja Iñigo Amoribieta issued this statement to our friends at . he he the company neither confirmed nor denied what was published about this movement in the online food sector:
“Since I joined La Nevera Roja there have been rumors of acquisitions by various companies. As anyone can imagine, the purchase of La Nevera Roja would represent a strategic issue for Just Eat, given our strong position in Spain, and also for other players in the sector who wish to be present here.
Contrary to what the article says, the author never contacted us and La Nevera Roja, far from suffering a slowdown in sales in recent months, has broken records in orders, income and margins. This seems like a way of using the press to destabilize a competitor or drive down the price of what, as we say, would be a strategic acquisition. For now, we have nothing more to add.”
On December 26, 2015, I asked the CEO of La Nevera Roja about the possibility of the company ceasing operations, which was the first rumor that reached me. In January, minutes before the publication of this article, I sent three emails to The Red Fridge, Rocket Internet and Just Eat to find out his side of the story. To be totally honest, I probably should have sent them sooner.
Shortly after this update, La Nevera Roja sent a new statement, denying that the sale had been completed. Now, however, it has been definitively closed.
“Like any large and strategic business, La Nevera Roja has been approached several times by interested parties in a corporate transaction, but there has been no purchase of La Nevera Roja. La Nevera Roja has continuously broken records in orders, revenue and margins in 2015, a trend that continues in 2016″
The curious movement of an online food giant
Global Online Takeaway Group is the name of the holding company created by Rocket in February of last year, when it acquired at least 7 online food delivery companies on two different continents, including The Red Fridge and Pizzabo (Italy). At that time, Rocket also announced an investment of 496 million euros in , one of the largest companies in the online food sector and a competitor of FoodPanda.
Since its IPO in October 2014, Rocket’s share price has fallen by more than 50% and in January, when we talked about the purchase, it was trading at €18.80. At the time of the IPO, the German giant had a market capitalization of €8.4 billion. At this time its value on the stock market is 3,100 million, and it is still the most valuable technology company in Europe.
Rocket is under the scrutiny of investors and the media in recent times. According to Reuters, the company decided at the last minute to freeze HelloFresh’s IPO plans due to internal problems and major differences with Kinnekiv, the Swedish investor that controls 14% of Rocket and is also a benchmark investor in many of its subsidiaries. On the other hand, the English Just Eat saw its share price rise 40% in the last 12 months, experienced a 57% increase in order volume
In October 2015, the Financial Times wrote about “the German eCommerce group’s struggle for profitability” citing numerous analysts and investors who had long have expressed reservations about the complexity of Rocket Internet. The company has lost a significant number of key managers in recent months.
Its co-founder Oliver Samwer talked about this and other problems in an interview on stage at London TechCrunch Disrupt.
According to my sources, Rocket is also planning major divestitures in Lino, one of the most important online stores in the retail sector in Latin America. These sources say that 30% of Linio’s staff may be laid off in the coming weeks. Linio currently has 5,100 employees in the region.
The purchase of La Nevera Roja: a 12-month process
The purchase of the Nevera Roja by Rocket Internet was the largest exit in a Spanish technology company in 2015, if we do not count Although the price of the purchase of this local leader in online food by Rocket was never officially announced, I understand that it was close to 80 million euros, mostly in cash.
Comparison of exits of Spanish startups: La Nevera Roja, Trovit and Akamon
After the purchase of La Nevera Roja by Rocket, its co-founders left the company, and now they are embarked on different projects. Iñigo Juantegui is about to launch a new one and José del Barrio recently presented a venture capital fund of 20 million euros focused on eCommerce.
The purchase of La Nevera Roja came at the right time for the company and its investors, who I understand have received offers from Just Eat and other companies in the online food sector before closing the deal in February of last year. At that time Just Eat and La Nevera Roja they had similar percentages of the market in Spain. Just Eat has traditionally been very strong in small Spanish cities, with La Nevera Roja a close second in the urban areas of Madrid and Barcelona.
Ever since Rocket’s purchase of The Red Fridge took place, hehe differences between it and Just Eat have widenedand currently Just Eat makes 4 million online food deliveries per year for 2 million from La Nevera Roja. This is the third purchase of Just Eat in Spainafter buying in 2012 and Food2U in 2015. Evaristo Babé and Diego Ballesteros, founders of Sin Apron, moved to Mexico after the operation,
The purchase came at the best time for the Spanish online food company
Several sources close to the operation told me that, after the purchase, Rocket Internet imposed harsh limitations to the day-to-day operations of La Nevera Roja, which included cancel the TV advertising campaign and other aspects that generated a significant proportion of their food sales online. They also made major changes in the direction of the company.
“In a matter of weeks sales dropped dramatically and since then La Nevera Roja has not recovered. This is the first step in Rocket’s strategy to sell many of the companies he bought in January. The first steps of a failed strategy to build a global network dedicated to food»said an industry source who prefers to remain anonymous.
Jaime Novaa,
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