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Uber to acquire Foodpanda’s Taiwan unit from Delivery Hero in a $950 million cash deal.

ByYasmeeta Oon

May 16, 2024
Uber to acquire Foodpanda's Taiwan unit from Delivery Hero in a $950 million cash deal.

Uber to acquire Foodpanda’s Taiwan unit from Delivery Hero in a $950 million cash deal.

Uber Technologies announced on Tuesday that it will purchase the Taiwan unit of Delivery Hero’s Foodpanda for $950 million in cash. This acquisition is a strategic move to bolster Uber Eats’ presence in Asia, with a particular focus on strengthening its market position in Taiwan. Concurrently, the deal highlights Delivery Hero’s ongoing exit from this market, as it continues to divest its operations across Southeast Asia.

  • Transaction Amount: $950 million in cash
  • Additional Investment: Uber will acquire $300 million in newly issued ordinary shares of Delivery Hero
  • Completion Timeline: First half of 2025
  • Market Impact: Transition of Foodpanda’s local consumers, merchants, and delivery partners to Uber Eats

In addition to the primary transaction, Uber will also take a stake in Delivery Hero, purchasing $300 million in newly issued ordinary shares of the Germany-based company, which operates food delivery services worldwide. Uber stated that this acquisition, one of the largest cross-border deals originating from Taiwan, is expected to be finalized in the first half of 2025.

Upon completion, Foodpanda’s local consumers, merchants, and delivery partners will transition to Uber Eats. This move is expected to consolidate Uber Eats’ dominance in Taiwan’s food delivery market, where it already holds a significant share.

According to recent reports, from January 2022 to August 2023, Foodpanda led the market with 52% market share, while Uber Eats held 48%. Other competitors, such as Foodomo and various other fast food delivery apps, collectively account for less than 8% of the market.

Market Share Distribution (January 2022 – August 2023)

CompanyMarket Share
Uber Eats48%
Other Apps<6%

Pierre-Dimitri Gore-Coty, Senior Vice President of Delivery at Uber, commented on the acquisition: “Taiwan is a fiercely competitive market, where online food delivery platforms today still represent just a small part of the food delivery landscape. We’re excited about the opportunity to deliver even greater convenience and value through this transaction in the years ahead.”

Uber highlighted the geographical synergies expected from the deal, noting that consumers will benefit from Uber’s wider selection across northern Taiwan and major urban centers, combined with Foodpanda’s strength in southern Taiwan and smaller cities.

Taiwan’s online food delivery market is projected to grow significantly, reaching approximately $68.5 million by 2029, up from $51.3 million in 2024.

The food delivery market has experienced significant fluctuations. Unit economics and the challenge of achieving economies of scale in competitive markets have driven considerable consolidation. Companies that once had global ambitions are now refocusing on their home markets.

This trend is particularly evident in the “instant grocery” sector. Billions of dollars in fundraising have been wiped out as startups fold or are acquired by larger companies, often for minimal returns. Larger players, such as Getir, have also downsized.

Analysts at Bernstein note that Taiwan’s established food delivery industry and concentrated topography make it an attractive market for Uber. They emphasize Taiwan’s strong GDP per capita compared to the broader Asian market and highlight Uber Eats’ robust positioning. Taiwan’s business funnel is notably strong, with an average of seven monthly orders per user, compared to the typical 3-5 orders in other markets. This also leads to a higher membership contribution in gross bookings.

Meanwhile, Delivery Hero plans to focus its Foodpanda business on other markets. Niklas Östberg, CEO and co-founder of Delivery Hero, remarked, “The strength of our Taiwanese business is a testament to the hard work of many teams over the last eight years. To build a world-leading service, we need to focus our resources on other parts of our global footprint where we can have the largest impact for customers, vendors, and riders. This deal gives Foodpanda an exciting runway in Taiwan, and we wish them all the best in their next chapter.”

In February, Delivery Hero terminated talks with an undisclosed third party regarding the potential sale of Foodpanda in select Southeast Asian markets, including Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar, and Laos. These talks were part of Delivery Hero’s efforts to streamline operations following September layoffs and intense competition with Grab in the region.

  • Uber’s Acquisition: A strategic move to strengthen its position in Taiwan.
  • Market Leadership: Foodpanda and Uber Eats dominate with a combined market share of 100%.
  • Growth Projections: Taiwan’s online food delivery market expected to grow from $51.3 million in 2024 to $68.5 million by 2029.
  • Industry Trends: Significant consolidation and strategic refocusing in the food delivery sector.
  • Delivery Hero’s Strategy: Focusing resources on other markets after divesting its Taiwan unit.

Uber’s acquisition of Foodpanda’s Taiwan unit marks a significant milestone in the competitive landscape of the food delivery market in Asia. This strategic move not only enhances Uber Eats’ market position but also underscores the ongoing consolidation and strategic realignment within the industry. As Uber and Delivery Hero chart their respective courses, consumers and market dynamics will continue to evolve, shaping the future of food delivery in Taiwan and beyond.

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Featured Image courtesy of DALL-E by ChatGPT

Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.

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