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DoorDash buys Finnish delivery app Wolt in €7bn all-stock deal

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Delivery app DoorDash has reached a deal to acquire Finnish delivery operator Wolt in an all-stock deal worth €7bn, in what would be the most expensive takeover yet in Europe’s hyper-competitive rapid delivery market.

Helsinki-based Wolt, which has more than 4,000 employees, operates in 23 European markets including Germany, where DoorDash has been eager to gain a foothold shuttling food and groceries to consumers.

The acquisition “really allows us to accelerate launch” in markets beyond DoorDash’s native US, Tony Xu, chief executive, told the Financial Times. “This is a business that was designed to be international, so we couldn’t be more thrilled.”

For DoorDash, based in San Francisco, the deal would provide access to 22 new countries representing a potential customer pool of 700m, Xu said. News of the deal sent DoorDash shares soaring about 20 per cent in after-hours trading on Tuesday.

The company is also planning to confirm a $400m investment in grocery app Flink as soon as Wednesday, two people with knowledge of the deal told the FT. The injection comes as part of a $600m Series B round that will give the Berlin-based company, which is less than a year old, a pre-money valuation of $2.1bn.

The transactions herald something of a “European cold war” for delivery apps, Barclays’ analyst Ross Sandler said, reflecting the cut-throat dealmaking that has taken place as big players move to swallow up smaller rivals that have shown momentum.

“Frankly speaking, if you had asked me a few months ago, I would have said we would rather compete [against DoorDash],” Miki Kuusi, Wolt’s founder and chief executive, said.

“I just saw that we can do so much more together, because ultimately, we’ve always been an underdog company that came from a difficult home market.”

Earlier on Tuesday, US-based Gopuff announced it had expanded into the UK as part of its own aggressive international expansion, having bought out two British delivery players, Dija and Fancy.

Kuusi will run DoorDash International, a new division for its operations outside the US. He will report to Xu, although would not say where he planned to be located.

Other “key executives” would also be joining DoorDash, the company said. The deal is expected to close in the first half of 2022, subject to regulatory approval.

Wolt, founded in 2014, had raised more than $800m as a private company, including a $530m round of financing in January led by Iconiq Capital.

The company’s revenues tripled to $345m last year and it recorded a net loss of $45m, it said at the time of the financing.

The app has more than 2.5m active users, according to an investor presentation published on Tuesday. It said Wolt’s gross order volume — the total value of all transactions — was more than $2.5bn, on an annualised basis.

Last year Wolt was second among the fastest-growing companies in Europe in a tally published by the Financial Times.

News of the acquisition came as DoorDash reported third-quarter earnings.

It beat analysts’ expectations on revenue, gross order volume and adjusted earnings before interest, taxes, depreciation and amortisation, but slumped to a $101m net loss — more than double its loss compared with the same period last year. The company said it was because of the costs of last year’s initial public offering, and stock-based remuneration.

DoorDash forecast order volumes would remain constant for the rest of the year, and said adjusted ebitda could fall anywhere between $0 and $100m.

“People are going back inside stores, and in-store dining is seeing record highs,” Xu said. “And so we are seeing a normalisation of growth rates, but I think it’s important to put this in context that delivery is here to stay.”

He added that 12 per cent of DoorDash’s active users were using the service to shop for items beyond restaurant meals, up from single digits at the beginning of the year.

Like other gig-economy companies, DoorDash faces challenges in attracting workers. The company said it had 3m “dashers”, or couriers, on its platform in this year’s second quarter, but did not give a number for the third quarter.

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