Berlin-based Delivery Hero, which acquired Foodpanda in 2016, is about to bring a new player to the food delivery race in Singapore.
The firm announced an agreement to acquire South Korean operator Woowa Brothers for US$4 billion, after which they will both set up a joint venture in Singapore.
Together, the two companies plan to go up against the likes of Grab, Gojek, Deliveroo and Uber Eats to take a bite of Asia’s growing appetite for food delivery services.
Delivery Hero is a publicly listed company worth almost US$11 billion, and operates in more than 40 countries globally.
In this deal, the German firm will first acquire an 87% stake in Woowa Brothers from its investors like Goldman Sachs, Sequoia Capital, and Singapore’s sovereign wealth fund GIC.
It will then buy over the remaining 13% stake controlled by Woowa at a later date.
Woowa’s Founder and CEO Kim Bong-jin is set to head the new Singapore venture together with Delivery Hero.
Founded in 2010, Woowa’s Baedal Minjok app has been the leading food delivery service in South Korea, the fourth largest market for online food orders in the world.
Despite being ahead of Delivery Hero’s app Yogiyo, which comes in second, Woowa said its decision to sell is a “survival strategy” as competition grows fiercer.
A Woowa Brothers spokesperson told Reuters: “The [food] delivery market has been flooded with gigantic Japan-backed capital and influential online platforms, leading Woowa to factor in partnership as a survival strategy.”
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