Food delivery service Deliveroo has accepted a £2.9 billion buyout from its American competitor, Doordash, which will result in a payday of £66 million for its employees.
The London-founded company, established in 2013 by Will Shu and Greg Orlowski, received an offer of 180p last month, and the board has now recommended this contract to shareholders.
Current and former staff members hold a total of 335.5 million shares, leading to a payout of £65.7 million if the deal goes through.
Shu stands to gain £172 million from his 6.4% stake in the business. He remarked, “We’re on the brink of a new transformative chapter. Doordash and Deliveroo share aligned values, strategic vision, and integrity.”
This acquisition will see Deliveroo, which employs about 4,000 people—less than half of its workforce when it debuted on the London Stock Exchange four years ago—combine operations with Doordash, which has a presence in 40 countries.
However, the takeover could lead to job losses of about 1% to 3% of the workforce, potentially impacting up to 830 roles, primarily in management and business support.
Doordash aims to minimize redundancies, not replace departing employees, by carefully managing workforce changes. Some roles tied to Deliveroo’s previous public status are also expected to be cut, with the headquarters remaining in London.
As the largest food delivery app in the U.S., Doordash was also founded in 2013 and currently employs 23,700 individuals, boasting over 1 million riders serving meals across 30 countries, along with more than 42 million active app users.
Doordash stated its commitment to maintaining the current partnership agreement with Deliveroo and GMB Union, without any significant changes to its rider contracts.
Tony Xu, Doordash’s CEO and co-founder, mentioned having a “deep respect” for the Deliveroo team, emphasizing their shared focus on customers, consumers, merchants, and riders.
Shu and Orlowski started Deliveroo out of frustration with limited late-night food options when working long hours, and initially relied on scooters for deliveries.
Deliveroo collaborates with around 176,000 restaurants, grocery stores, and retailers, with over 130,000 riders catering to 7 million active customers in the past month. It operates in nine countries, including Belgium, France, and Italy. The company recorded its first annual pre-tax profit of £12 million and revenues of £2.1 billion in 2024.
Deliveroo experienced significant growth during the Covid-19 pandemic when restaurant closures led to a surge in food delivery orders. However, demand has waned since restrictions were lifted.
Initially priced at 390p per share in 2021, the stock plummeted by 26% on its first trading day, earning the nickname “Flopperoo.”
