Chinese cuisine

DoorDash buys Wolt to expand in Europe as third quarter sales increase, Retail News, ET Retail

DoorDash purchases Finnish delivery service Wolt Enterprises, expanding its reach in Europe and other markets.

The $ 8.1 billion deal announced on Tuesday will take DoorDash to 22 countries where it does not currently operate, including Germany, Sweden, Hungary and Israel.

The combined companies will reach 700 million people, DoorDash CEO Tony Xu said.

“We believe these markets provide an opportunity to grow our international business to multiples of what it is today,” Xu said on a conference call with investors. “This should allow us to invest and grow more efficiently than we could have done on our own and in a shorter time frame.”

Japan is the only market in which DoorDash and Wolt overlap.

San Francisco-based DoorDash Inc. was expected to partner with a European ally in the highly competitive and rapidly consolidating delivery market. Amsterdam-based Just Eat Takeaway gobbled up Grubhub in a $ 7.3 billion deal announced last year.

Wolt has 4,000 employees, but DoorDash wouldn’t say how many drivers make deliveries for the company. The company’s gross order volumes reached an annual rate of $ 2.5 billion at the end of the third quarter. By comparison, DoorDash said its gross order volumes rose 44% to $ 10.4 billion in the third quarter.

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

Kuusi said Wolt has already conquered Finland’s tough market, where customers have little delivery awareness, drivers paid for dearly, and low density in cities, making it harder to make a profit.

“All the other countries were a lot easier to do,” Kuusi said.

DoorDash shares climbed 19% in after-hours trading.

The news came as DoorDash reported higher than expected third quarter sales.

The delivery company said its revenue rose 45% to $ 1.26 billion in July-September compared to the same period a year ago. That topped Wall Street’s forecast by $ 1.17 billion, according to analysts polled by FactSet.

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

DoorDash said it also increased 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 out-of-restaurant delivery, down from just 1% in the first quarter of this year.

Its net loss widened to $ 101 million for the quarter, from $ 43 million a year ago, as it continued to spend a lot of money on its expansion. The loss was 30 cents per share. Wall Street had forecast a loss of 10 cents per share.

Leave a Reply

Your email address will not be published.