Deliveroo Business Model: How Deliveroo Works & Make Money?
Online food delivery has gained huge popularity over the last decades and combines two things: comfort and instant access. Most people prefer to use an online food delivery platform like Deliveroo to order hot and ready-to-eat food. The online food delivery market size has reached around 130.8 billion in 2022, it’s expected to grow at 13.2% of CAGR between 2023 and 2028. The market is forecasted to increase and reach around USD 275.22 billion by 2028.
Image: Expert Market Research
Looking at the growing food ordering and delivery market many are choosing to develop an app similar to Deliveroo. Deliveroo is a British online food delivery company that has satisfied the hunger of millions of customers.
If you are thinking of building an online food-ordering app like Deliveroo for your business you have made the right decision. But before moving ahead have deep insight into the Deliveroo business model, how the online platform works, makes money, and more.
What is Deliveroo?
Deliveroo is the best-rated online food delivery company launched in 2013 by Greg Orlowski and Will Sh in London, England. The company operates in France, the United Kingdom, Italy, Belgium, Ireland, the United Arab Emirates, Kuwait, Singapore, and Hong Kong.
Deliveroo formerly operated in the Netherlands, Australia, Germany, Taiwan, and Spain. In 2021 the company stated that it desired to reach break-even and become more profitable in half of 2023 or the first half of 2024. Deliveroo Editions operates Dark Kitchen, its subsidiary operation, for the preparation of delivery-only meals.
Deliveroo HOP operated from delivery-only grocery stores managed by Deliveroo, working in partnership with grocers. The company also provides delivery and technology for online grocery to major retailers in the UK. The company was listed on the London Stock Exchange in 2021 as Deliveroo Holdings plc. In 2022, Deliveroo announced that the company experienced 70% growth in Gross Transaction Value year-on-year in constant currency.
Success History of Deliveroo
Trade Name: Deliveroo
Company Type: Public limited company
Industry Served: Online food ordering and Food delivery
Founded Year: 2013
Headquarters: London, England, UK
Revenue: £1,824 million
Number of Employees: Around 3,108
Couriers: More than 110,000 self-employed couriers
Deliveroo breaks profits in the second half of 2022 even though the orders drop. The company had surgical demand during the COVID-19 spread, which boosted the orders and profit of Deliveroo to 6% to 1.8 billion pounds ($2.2 billion), as the rise in restaurant prices offset a 2% in orders.
Deliveroo has gained huge popularity among food lovers and satisfied their hunger during the pandemic. Besides food delivery, the company started grocery delivery to cater to the growing demand during the lockdown. The successful Deliveroo business model has impressed many, let’s explore more.
Deliveroo Funding History and IPO Details
In 2014, Deliveroo raised around £2.75 million series A investment round from Hoxton Ventures and Index Ventures, as well as an assortment of angel investors. In series B funding in 2015, Roofoods Ltd which was doing business as Deliveroo received around US$25 million.
The funding round was led by Accel with participation from Hoxton Ventures, Index Ventures, and Hummingbird Ventures at an estimated valuation of $100 million. Deliveroo provides deliveries for 750 restaurants. In series C, it secured $70 million in investment from Greenoaks Capital and Index Ventures, marking Deliveroo’s third funding round in a year.
In Series D Funding in 2015, Deliveroo raised around $100 million, and $275 million in 2016 from the hedge fund Bridgepoint. In 2017, the food delivery upstart Deliveroo added $385 million and $98 million, bringing the Series F round total to $480 million.
In Series G in 2019, Deliveroo raised $575 million in the funding round led by Amazon, increasing the total to $1.35 billion. In 2021, the company raised a $180 million Series H round, bringing the total raised to date to $1.53 billion.
Deliveroo Business Model: How the Takeouts and Grocery Delivery Platform Works?
Deliveroo delivers takeouts and essential groceries from local partners straight to customers’ doors on their demand. Deliveroo was started with a basic model of offering customers quick services on a neighborhood-by-neighborhood level. The takeout and grocery delivery platform enables customers to order needed things from nearby stores and get them delivered to their doorsteps.
The company integrated an aggregator strategy with a logistics and marketplace model to build a hyperlocal on-demand business model. The updated business model helped the company to deal with the problem of poor and low-rated restaurant delivery.
The company was started with the aim to satisfy customers’ on-demand needs now operating in more than 12 counties. The company has partnered with 170,000+ restaurant and grocery partners and 180,000+ supporting riders to deliver groceries and hot meals without any delay.
How Deliveroo Works?
The Deliveroo business model operates on a dual partnership model which combines logistics and an aggregator model. The company has partnered with many restaurants, grocery stores, and delivery persons to deliver groceries and food to customers’ doors on time. The workflow of the platform can be summarized as below:
- Customers can download apps for iOS and Android or can browse the website to find what they are looking for.
- After downloading the app users can register on the platform, set locality, and search for nearby stores.
- Customers can choose the items and check the payment before completing the checkout process.
- Stores accept the delivery request and prepare the delivery.
- A delivery person gets the request once the order is ready for delivery.
- The delivery provider delivers the item to the customer’s doorstep and collects payment.
- Customers can then rate the service and delivery provider as per their experience gained.
Deliveroo Revenue Mode: How the Food Delivery Company Makes Money?
Deliveroo revenue reached an all-time high in 2021, it was measured at around 1.82 billion British pounds, a growth from the previous year’s 1.16 billion. The takeout and grocery delivery app uses a brilliant monetization strategy of earning money. Deliveroo has added lots of revenue sources to its revenue strategy, let’s explore each one by one.
Commission on Delivery Orders
Deliveroo charges a commission on restaurant orders. The company charges around 25 to 45% per order. The charges differ based on restaurant locations, agreements, and more. On-boarding restaurant fees are one more revenue channel through which the delivery platform makes money.
Deliveroo Plus Subscriptions
Users can easily subscribe to Deliveroo Plus and receive extra benefits from using the platform. The benefits are free delivery on above £10, special offers, all-time customer services, and a seven-day free trial.
Deliveroo for Corporates
Any business owner or corporates can easily compose food requests for their employees or team. It enables synchronizing food budgets and fixing the budgets. Employees can order from the eateries via mobile apps. The order benefits will be divided among the Deliveroo and diners.
Deliveroo has launched the concept of Deliveroo Editions in its business-driving eateries in various countries, Ghost Kitchens. It prepares on-demand food and has no habitual premises for a dine-in facility. Deliveroo has also launched Helicopter Dining, providing meals to customers 1000 ft above the air.
Get Ready to Launch Your App Like Deliveroo Today!
A Deliveroo business model and workflow are flexible and can be beneficial to all delivery businesses. The future of the food and grocery delivery business is noteworthy, hence starting a business similar to Deliveroo is a smart decision.
As the market has numerous opportunities for food and grocery startups, you can build an app similar to Deliveroo. If you want to launch successfully then White Label Fox can provide you with the best development services. Get in touch at [email protected]