Delivery Hero buys InstaShop for $370m
Delivery Hero Ag Na O.N.
€29.36
17:30 07/01/25
Delivery Hero has bought InstaShop, a Middle East and North Africa online grocery platform, for $370m (£280m) to capitalise on the boom in delivery services spurred by the Covid-19 crisis.
The German food delivery group said the purchase would expand its so-called quick commerce operations. It will pay an initial $270m with the remainder depending on InstaShop's performance after the acquisition.
InstaShop, founded five years ago, has has half a million users in United Arab Emirates, Qatar, Bahrain, Egypt and Lebanon. Its app offers deliveries of groceries, flowers homewares and other items and promises delivery within an hour.
The Dubai-based business connects customers to sellers of products and leaves deliveries to the its 1,500 vendors. Delivery Hero said it would help InstaShop expand into new markets.
Delivery Hero is best known as a rival to Just Eat Takeaway in bringing restaurant meals to customers homes. It also delivers other products and InstaShop will help it expand more quickly, Chief Executive Niklas Östberg said.
"It will take years until people realise they can actually get anything delivered by us including groceries," Östberg told the Financial Times. InstaShop's strength is its close association with groceries, he said.
InstaShop is profitable and its gross merchandising volume of $300m a year is up 330% in the past year, Delivery Hero said. It will operate as a separate brand under its existing management team, led by Chief Executive John Tsioris.
Delivery Hero shares fell 2% to €93.36 at 10:50 BST.