DoorDash expands into Europe with US$8.1B acquisition of Wolt

FINLAND – American multinational food delivery giant, DoorDash is buying Finnish delivery service Wolt Enterprises as it seeks to expand into Europe and other markets. 

The US$8.1 billion deal will bring DoorDash into 22 countries where it doesn’t currently operate, including Germany, Sweden, Hungary, and Israel. 

DoorDash CEO Tony Xu revealed that the combined companies will reach 700 million people with Japan being the only market where both DoorDash and Wolt overlap. 

“We believe these markets provide an opportunity to grow our international business to multiples of what it is today,” Xu said in a conference call with investors.  

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“This should allow us to invest and expand more efficiently than we could have done on our own and on a faster timeline.” 

Wolt has 4,000 employees and had gross order volumes hit an annual run rate of US$2.5 billion at the end of the third quarter.  

Following the deal, Wolt co-founder and CEO Miki Kuusi will run DoorDash International when the transaction closes, likely in the first half of 2022. 

Kuusi said Wolt has already conquered the difficult market of Finland, where there is low customer awareness of delivery, high pay for drivers, and low density in cities, which makes it harder to make a profit. 

The news came as DoorDash reported higher-than-expected third-quarter sales. Revenue grew 45% to US$1.26 billion in July-September from the same period a year ago.  

The company said it had a record 9 million DashPass subscribers at the end of the quarter, up from 5 million at the same time last year.  

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DashPass members, who pay US$9.99 per month for free deliveries on most orders, tend to order more frequently, the company said. 

The food delivery company further noted that it also grew sales by adding non-restaurant partners like Bed Bath & Beyond and Total Wine in the third quarter.  

Xu said 12% of the company’s active users are now trying non-restaurant delivery, up from just 1% in the first quarter of this year. 

Losses for the company however widened to US$101 million for the quarter from US$43 million a year ago, as it continued to spend heavily on expansion.  

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