U.S. food delivery giant DoorDash has agreed to acquire UK-based rival Deliveroo for £2.9 billion ($3.9 billion), the companies announced Tuesday. The acquisition marks a significant expansion for DoorDash, creating a combined business that spans over 40 countries and serves approximately 50 million monthly-active users.
“This combination will bring together DoorDash’s strong operating playbook with Deliveroo’s local expertise to invest in innovation and execution at an even higher level,” said DoorDash CEO Tony Xu.
Deliveroo’s Journey and Challenges
Founded in 2013 by American entrepreneur Will Shu, Deliveroo became one of the UK’s most recognizable delivery brands. It posted its first annual profit in March, after years of significant investment costs. Its IPO in 2021 was London’s largest in a decade, initially valuing the company at £7.6 billion.
However, the £1.80 per share offer from DoorDash is less than half Deliveroo’s IPO price of £3.90. Shares in Deliveroo rose 2% on the FTSE 250 Tuesday, following a sharp rise last week after news of the potential takeover emerged.
Despite a surge in demand during the pandemic, Deliveroo struggled with increasing competition and recently pulled out of several markets, including Hong Kong, Australia, and the Netherlands.
Europe and Beyond
The acquisition supports DoorDash’s broader ambition to grow outside the United States. After entering the European market in 2021 with its $8.1 billion purchase of Finnish delivery service Wolt, DoorDash now expands further into Deliveroo’s key territories, including the UK, France, Ireland, Italy, and several Middle Eastern and Asian markets.
Deliveroo CEO Will Shu called the deal “the beginning of a transformative new chapter.”
No Immediate Operational Changes
San Francisco-based DoorDash said it does not plan to relocate Deliveroo’s London headquarters and expects no changes to the contracts of its riders. Food delivery platforms have long been under scrutiny over how they classify and treat gig economy workers.
In 2023, the UK Supreme Court ruled Deliveroo riders do not qualify for trade union rights such as collective bargaining. The company also exited Spain after the country enforced new rules requiring delivery riders to be treated as employees.
Earlier this year, DoorDash agreed to pay nearly $17 million to settle allegations in New York that it withheld tip money from drivers.
Deal Timeline and Industry Trends
The deal is expected to close in the final quarter of 2025, pending shareholder and regulatory approval. It follows other major consolidation efforts in the industry, including Dutch investment group Prosus’ €4.1 billion bid for Just Eat Takeaway.com.
As competition stiffens and regulatory pressures increase, major players like DoorDash and Deliveroo are betting on scale to maintain profitability and consumer reach.
