Just minutes from the bells that would begin in 2022, one of the most important business operations in Spain in 2021 was closed: the European giant Delivery Hero was gaining control of Glovo. One of the leaders in home delivery in Europe now takes control of the Spanish paladin, in a ‘New Year’s Eve operation’ that obeys different keys.
On the one hand, Glovo is increasing its link with a ‘big fish’ worldwide and is reinforcing a scenario in which more and more giants are handing out home delivery. On the other hand, it obtains a new and more direct capital injection, of regarding 780 million euros, to maintain the pace of competition in view of the aggressive bets of its competitors. In addition, it provides resources to cover the debts that it continues to carry with the Social Security, given the old legal disputes over the use of false self-employed workers and on which new ones might come, in view of the ongoing investigations. Inspection in cities such as Barcelona or Madrid. In addition to the million-dollar bonus that the Glovo management team will take for sale.
Delivery Hero’s interest in gaining control of Glovo comes from afar, and rumors of an impending purchase have been circulating in recent years. While Delivery Hero was already part of Glovo’s capital (it controlled 44% of the shares), following the operation and at the expense of the approval of European regulators, it now takes control of the firm and becomes the main investor. with 79.4% stake in this firm, valued following the operation at 2.3 billion euros.
Why have the founders Óscar Pierre and Sacha Michaud (who retain Glovo’s management following the operation) now decided to approve it? “I am delighted to have found a partner who shares our ambition and culture, and who will continue to support us in this adventure,” Oscar Pierre said in a New Year’s Eve statement announcing the operation.
Global competition
Sources familiar with the sector point out that in this “we will continue to support” is one of the key elements of the operation. And for two reasons. On the one hand, while Glovo is a ‘big fish’ of ‘delivery’ in a small pond like Spain, its weight internationally is far from the great sharks. Like Doordash, referring to the United States, where it controls almost 6 out of 10 orders and which a few months ago bought from the Finnish Walt for 7 billion euros. Or Just Eat, whose worldwide market volume is 10 times that of Glovo and which was recently bought by the American GrubHub for 6.5 billion euros. Or Uber Eats, the delivery division of the technology giant Uber, which last year bought the American Postmates for 2.34 billion euros.
“In order to continue growing, I needed the protection of someone like that,” said the same sources. From Delivery Hero, in the presentation prepared to explain to its investors the operation, highlights the complementarity of its areas of influence with those of Glovo as one of the star values to maintain its expansionary strategy worldwide.
Financial muscle
“The platforms are betting on competing through exclusive contracts with restaurants. And that’s why they need financial muscle “, says UPF professor Juan José Ganuza. “The pressure from very aggressive firms like Uber Eats, which has a competitive advantage because of their synergies with other means of transportation, is forcing them to capitalize on continuing to compete,” he says.
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