Shares of food delivery firm Deliveroo climbed over 10% Monday after the company announced larger German rival Delivery Hero has taken a 5.09% stake in the business.
The firm’s stock climbed from £3.36 ($4.66) per share to £3.60 per share in early deals on the London Stock Exchange Monday.
In a note to investors, Deliveroo said it received a notification “of major holdings in the company’s shares from Delivery Hero after market close on 6 August 2021.”
Founded in 2013 by Will Shu and Greg Orlowski, Deliveroo got a boost from Amazon in 2019 when the e-commerce giant led a $575 million funding round into the company.
It made a loss of £223.7 million on revenues of £4.1 billion in 2020, which is substantially less than the £317 million it lost on £2.5 billion of revenue in 2019.
Deliveroo and Delivery Hero don’t, however, compete in the U.K., which is Deliveroo’s main market. That’s because Delivery Hero sold its U.K. business, Hungryhouse, to Just Eat in 2016 for around £200 million.
“Like UberEats and DoorDash, Deliveroo and Delivery Hero rely on an army of self-employed couriers to deliver food from restaurant kitchens to people’s homes and offices in cities around the world in around 30 minutes,” said the founder.