Doordash has held talks with Deliveroo over possible takeover

Deliveroo operates its food delivery service in a number of countries including the UK, Ireland, France, and Italy. 

US meal delivery group Doordash flagged an interest in a takeover of Deliveroo last month, according to two people familiar with the matter.

Deliveroo operates its food delivery service across the UK, Ireland, France, Italy, Hong Kong, among others.

The San Francisco-based Doordash made the approach to Deliveroo, but talks ended after disagreement on valuation, said one of the people, speaking on condition of anonymity because the matter is private.

There are no talks ongoing, the person added. Doordash and Deliveroo both declined to comment.

Deliveroo shares jumped as much as 6% on Wednesday morning following the news. The company is now valued at £2.1bn (€2.48bn).

There has been a slowdown in demand for online food delivery since the covid pandemic, and investors’ preference for more profitable companies amid higher interest rates have weighed on Deliveroo's shares since its March 2021 initial public offering.

The company’s shares are still down 67% from its peak in August 2021.

Deliveroo works with 180,000 restaurants and retail partners, and operates a network of 140,000 riders.

Doordash, which has a $46.57 bn (€43.6bn) market value, considered buying Deliveroo in 2022. Both companies declined to comment at the time.

In an interview with the Financial Times in January this year, Doordash chief executive Tony Xu said the group is looking to diversify outside of its core market in the US. Doordash acquired Finnish rival Wolt in an all-share transaction worth $8bn in 2021.

Online food delivery companies have looked to pivot away from unprofitable markets. Germany’s Delivery Hero said in May it planned to sell its Taiwan business to Uber and sold its minority stake in Deliveroo in January.

Deliveroo reported a return to order growth in its first quarter, with a 2% increase year-on-year driven by its operations in France, the United Arab Emirates and Hong Kong. Gross transaction value, a measure of the orders placed through its platform, rose 6% to £1.83bn.