Delivery Hero acquires Rocket Internet-backed startup Foodpanda

Berlin-based online food takeaway service Delivery Hero, one of Europe`s biggest start-ups, will acquire competitor Foodpanda, a sign of further consolidation to fend off new competition in Europe`s sought after food-delivery business.

Delivery Hero, which was valued at 2.8 billion euros ($2.96 billion) in its latest funding round in June, in a statement on Saturday said it signed a definitive agreement to buy Foodpanda, itself a Berlin-based start-up.

Delivery Hero and Foodpanda are both backed by German ecommerce firm Rocket Internet, which has invested 800 million euros in Delivery Hero last year and put 300 million euros into Foodpanda which focuses on deliveries in Eastern Europe, the Middle East and Asia.

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Delivery Hero in a statement said the acquisition will be funded by issuing new shares, with major shareholder Rocket increasing its stake to 37.7%.

The companies did not disclose a purchase price but other media reported earlier this year that Foodpanda failed to attract buyers at a $10-15 million valuation following slumping business in East Asia and India.

Currently Europe is home to many of the most active international players in the online food takeaway business and they are counting on their local ties, established customer bases and extensive restaurant networks to fend off new competition from the likes of Uber and Amazon.