Deliveroo shares surge after German rival purchases stake
Deliveroo shares have jumped by ten per cent to the highest level since trading began after a German rival purchased a stake in the company.
On Monday Deliveroo disclosed that it received a notification “of major holdings in the company’s shares from Delivery Hero after market close on 6 August 2021,” pushing share prices to highs of £3.60.
Berlin-based Delivery Hero has reportedly taken a 5.09% stake in Deliveroo adding to the list of delivery companies it has invested in worldwide, including Just Eat, Spain-based Glovo and South America’s Rappi.
Delivery companies have experienced runaway growth since the start of the pandemic amid surging demand.
Delivery Hero reported an 88% increase in orders during the first quarter of 2021 while revenue doubled compared to the same period last year, reaching €1.4bn (£1.2bn). Likewise Deliveroo’s transaction value has grown by 76% in the second quarter of 2021 reaching £1.7bn after the company received 78 million orders from customers.
Delivery Hero operates in 50 countries worldwide with the majority of its sales coming from the European market. However, the company lacks a major presence in the UK, Deliveroo’s principal market.
While news of the purchase has sent Deliveroo shares to the highest level since the company’s Initial Public Offering in March they are yet to reach the 390p price at which it launched.
Read more: Deliveroo lifts guidance as orders soar in second quarter