eCommerce: Food Delivery

Growing Food Delivery Market: Key Insights

• The COVID-19 pandemic triggered significant innovations and transformations in the groceries, food, and restaurant industry, with a swift shift towards online sales and delivery services.

• eCommerce in the food and beverage sector experienced substantial growth, along with a surge in meal delivery service revenues, reaching US$287 billion in 2021.

• Delivery Hero, a German service, emerged as the most well-funded global food delivery platform with US$9.9 billion in funding, driven by innovation, geographic expansion, and a diverse service portfolio.

• Despite industry-wide growth, most food delivery companies remain unprofitable, but some, like Delivery Hero, are making progress toward profitability. The industry's funding landscape continues to evolve.

2020 was a game-changing year for groceries, food and restaurant industries. What started off as a shock soon triggered a wave of innovations and new sales opportunities, resulting in one of the most fundamental transformations a business segment has possibly ever seen in such a short time.

The initial collapse in sales during the first Covid lockdowns, which hit restaurants and grocery vendors particularly hard, did not last for long, as players in the food industry had a backdoor: Online sale and delivery.

Online Food Delivery is Booming Since the Pandemic

eCommerce with food and beverages boomed, registering by far the highest growth rates of all eCommerce segments in the years 2020 and 2021. Revenues from meal delivery services surged as well, from a total global market volume of US$160 billion in pre-Covid 2019, to US$287 billion in the year 2021, according to Statista Digital Market Insights. For 2023, both eCommerce with groceries and meal delivery revenues are expected to grow further in the double-digit percentage range.

Accordingly, delivery services in the food and drinks business have become ever more popular among consumers: app downloads increased, and the market brought about an increasing number of competitors in search of high growth and profits in a flourishing innovative industry. As stated above, market figures prove them right. In relation to this, investors are keen to provide funding, investing a record US$19 billion in food delivery start-ups in 2021, according to estimates.

Delivery Hero in Its Own League

As of January 2023, Germany's Delivery Hero is by far the most well-funded online food delivery service in the world, having raised a total of US$9.9 billion, according to Crunchbase data. That is nearly three times as much as second-place Gopuff.

Delivery Hero’s success story is built on innovative technologies, geographic expansion and a broad service portfolio, including restaurant and grocery delivery as well as a quick commerce service. This makes Delivery Hero a successful aggregator, while U.S. based Gopuff is a pure quick commerce player focusing on high-speed delivery of groceries, processed through a sophisticated logistics structure.

Gopuff has raised US$3.4 billion in funding as of January 2023. Indian start-up Swiggy and the U.S. delivery service Instacart are head-to-head in ranks 3 and 4, having raised US$2.9 billion each by January 2023.

The list of the world’s most well-funded online food delivery companies features three other players from the quick commerce field: Getir, Gorillas, and Flink, all of them European companies. All other companies in the list are aggregators offering a broader range of services.

Sources: Crunchbase, Statista, ECDB