DoorDash dominates the delivery market – Mergers and Acquisitions

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To further loosen its dominance in the food delivery market, DoorDash, Inc. will acquire Wolt Enterprises OY in an all-stock deal worth approximately $8 billion.

The acquisition follows DoorDash’s successful IPO last December, when it raised $3.4 billion. Considered one of the hottest IPOs of 2020DoorDash’s entry into the public markets concluded a year of explosive revenue growth for the company.

While the COVID-19 pandemic has harmed many industries, especially restaurants, DoorDash and other food delivery businesses have benefited greatly from the closures. With restaurants shut down to in-person dining altogether — and even once they reopened, many former customers were hesitant to return — consumers have turned to DoorDash and other providers to allow them to eat at home. This served as a lifeline for ailing restaurants and brought new customers to the apps.

According to McKinsey, the food delivery market double in 2020 alone and is valued at $150 billion in Q3 2021. 50% all US consumers ordered food from a food delivery app, up from 44% of Americans in October 2020. And DoorDash came to dominate this burgeoning market: 57% of all those sales were made through its app . This compares to Uber Eats’ 24% market share and Grubhub’s 15%. But even with all of its success, DoorDash continues to pursue profitability, lose large sums because it is chasing that market share.

Source: Bloomberg’s second measure

This latest deal represents further consolidation in the acquisition market. Rival Uber Technologies, Inc., which operates Uber Eats, acquired Postmates Inc. in July 2020.

This latest acquisition expands DoorDash’s geographic reach. Based in Helsinki, Finland, Wolt delivers from restaurants and stores in 23 countries. While Connecticut Bankruptcy has historically focused on the US and Canadian markets, it has recently expanded to Australia and Japan. Wolt’s focus on European markets with more recent expansion into Asia complements DoorDash’s global footprint. As joint of companies Press release put it, “Joining forces with Wolt will deepen our pipeline of superb talent and allow us to accelerate our international growth, while increasing our focus on the United States”

According to the Matterhorn M&A databasewhich leverages both AI and lawyers to digest granular transaction points of publicly announced deals, Wold was advised by law firms Skadden, Arps, Slate, Meagher & Flom LLP and Roschier Lawyers Ltd., and financial advisor Qataryst Partners. DoorDash has been advised by law firms Wilson Sonsini Goodrich & Rosati and Allen & Overy LLPand financial advisor Goldman Sachs & Co. LLC.

DoorDash has also faced its fair share of litigation in recent years. Battles over municipal fee restrictions and driver employment status threaten the fundamentals of its business model and are sure to continue as the company expands.

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