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Are we full up on food delivery startups?

12 August 2016|by Ella Halmari

Although the food delivery wars have been raging on in Europe since Just Eat decided it was time to do away with digging around in drawers for the pile of takeaway menus, Deliveroo has carved out a success in their niche with deliveries from higher end restaurants without their own takeaway function. But UberEATS and its accompanying promo codes caused quite a stir when they appeared in London (and at Beauhurst) a few weeks ago. As colleagues and friends spread the word and ate as much free food as they possibly could, Deliveroo responded by closing the biggest UK equity investment so far this year - a colossal $275m round from Bridgepoint Development Capital, DST Global, General Catalyst Partners and Greenoaks Capital Management. As the companies prepare to battle for the “Uber-for-food” crown, we take a look at the food delivery startup market.

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We want our food and we want it now

Since we started tracking high-growth businesses in 2010 the food delivery market has seen a steady growth in the number of equity fundraisings in UK-based companies, up 67% from 2011 to 2015.  We predict the growth to continue in 2016, as we’ve already seen an equivalent number of deals to the whole of 2015. 

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Are we full up?

But could we have reached peak “food-on-demand”? It is unlikely that any copycats without the financial clout of Uber will have much success in entering the spaces occupied by the likes of JustEat, Delivery Hero, or Deliveroo. But we would still argue that there are plenty of opportunities for innovation in food delivery. Companies like City Pantry and OfficeServe are specifically targeting the office food market, where the ease of ordering in bulk repeatedly is key. Although we could see UberEATSCorporate, there is enough differentiation in service required for these companies to set themselves apart.

Other models are focusing on home cooking –  Cookoo provides meals cooked by freelance cooks at home, essentially allowing you to buy a home-cooked meal from your area. Fresh ingredient delivery companies like SimplyCook send recipes and the exact ingredients required for people too busy to do the shopping themselves, but who still want to prepare their meal themselves. It’s hard to say where to draw the line between actual convenience and novelty, but we predict growth in the food-on-demand market until all appetites have been satisfied.

Want to see some other startups to whet your appetite?

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