Six App Startups Revolutionising Food Delivery

Hand holding mobile with Order food with blur restaurant background, Order food onine business concept.

No one needs a drawerful of paper menus anymore – the food delivery tech revolution is here and a variety of apps let users get their favourite takeout meals, sometimes even if the restaurant doesn’t deliver. The market is already getting crowded, with logistics apps promising in-city deliveries of food and other products, bridging apps that connect users with local takeout joints and premium apps that bring users food from high-end outlets that don’t usually deliver. However, that hasn’t stopped the likes of Uber from taking an interest, with its recent launch of standalone app UberEATS. And despite a wealth of consolidation in the sector, there’s still plenty to choose from.

Here are six of the top food delivery apps:

Delivery Hero

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Delivery Hero was founded in Berlin in May of 2011 and has merged, consolidated and expanded its way to a seat at the top of the food delivery market in the last five years. The company works with more than 200,000 restaurants in 34 countries and a pre-IPO funding round last year valued it at over $3bn.

Delivery Hero didn’t just organically grow its way to greatness though, the company has also been very active in mergers and acquisitions. The firm owns Hungry House in the UK, foodora, Lieferheld and pizza.de in Germany, Yemeksepeti in Turkey and South Korean service Baedaltong. It’s also an investor in India’s TastyKhana and PedidosYa in South America. To date, the company has raised $1.4bn in funding, making it one of Europe’s most heavily backed tech startups. Investors include German tech conglomerate Rocket Internet and global venture investment firm Kite Ventures.

  • Largest food network in the world
  • 12 million orders processed each month
  • Currently valued at $3.1bn

Food Panda

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There must be something about Berlin that engenders food tech innovation, because Food Panda, another delivery startup that’s gone global, was also founded there. The firm was started in May 2012 and now operates in more than 500 cities worldwide. The company has raised millions in financing, including $210min in two rounds last year alone, and counts Goldman Sachs, Rocket Internet and iMENA Holdings among its investors.

Like most food delivery apps, Food Panda, which also operates as hellofood, keeps things simple. Customers find restaurants that deliver to them by entering their address details and can filter their options by cuisine type. The app also lets users review restaurants based not just on taste, but on delivery too. The company has a wide geographical reach and a marked presence in emerging markets, including Eastern European countries like Azerbaijan and Romania and African countries like Ghana and Nigeria.

  • Operating in five continents
  • Present in ten African countries and three in the Middle East
  • Raised $318m in funding to date

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Just Eat

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Another of Europe’s powerhouse food delivery services is Just Eat, which was founded in a Danish basement in 2001 and listed on the London Stock Exchange in 2014. The firm now boasts a market capitalisation of £2.4bn ($3.5bn) and operates in 15 countries worldwide. Like Delivery Hero, Just Eat has been expanding and acquiring businesses as the food delivery market consolidates. Most recently, the company spent €125m ($139m) on Spain’s La Nevera Roja, Italy’s PizzaBlo/hellofood and hellofood in Brazil and Mexico.

The app is a simple search tool for nearby restaurants that deliver, giving customers the option to filter by cuisine and pay by cash or card. Users get an estimated time of delivery and can choose to receive phone updates on their order as well. The company makes its money by charging the restaurants a hefty commission fee on transactions. As with all mobile food delivery brokers though, Just Eat is saving restaurants from having to build their own ordering applications and payment systems.

  • Like-for-like order growth of 46 per cent in 2015
  • Over 11 million active users
  • Revenue of £107.8m ($155.5m) in the six months to 30 June 2015
Just Eat's 2015 numbers

Just Eat’s 2015 numbers

Postmates

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At the end of the day, food delivery is all about logistics and apps like Postmates embrace this by delivering not just takeaways, but other local goods too. The company, headquartered in San Francisco, pledges to help city users get any kind of product, including hot food, delivered to them in under one hour. To do that, it connects them with local couriers, who go out and buy the takeaway food and bring it to them. The company’s last funding round in June 2015 raised $80m, valuing it at half a billion dollars. So far, the firm has been limited to cities in the US, but that’s about to change – Postmates is expected to launch in London later this year.

Postmates is purely a mobile app, without an accompanying online option, that allows users to search for available food deliveries and other products. However, it also allows real-time tracking of delivery in much the same way that Uber allows its users to keep an eye on available cars. That kind of up-to-the-minute information marks it out from its rivals. The company has also opened up its API to small businesses so that any developer can integrate delivery into their own restaurants and apps and access the firm’s fleet of drivers.

  • Surpassed 2.5 million deliveries in 28 markets in 2015
  • Has over 13,000 “Postmates” doing deliveries
  • Partners with Apple, Starbucks and Chipotle
Postmates' delivery growth. Credit: Business Insider

Postmates’ delivery growth. Credit: Business Insider

Grubhub

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With a market capitalisation of over $2bn, US food delivery app Grubhub is arguably the granddaddy of the food tech revolution. The company was founded in 2004 and merged with fellow early starter Seamless – founded way back in 1999 – three years ago. Half of the app and online firm’s orders are processed on mobiles as users order from more than a thousand US cities – and London.

Again, the app connects users with local delivering restaurants and allowing them to pick by cuisine and access reviews of the restaurants. The app also saves past orders from favourite restaurants so reordering is simplified. And in 2012, the company introduced Track Your Grub, a feature that gives the same real-time delivery information and order mapping available with services like Postmates and Uber.

  • In 2015, sent $2.4bn in gross food sales to takeout restaurants
  • Processes an average of nearly 242,000 orders daily
  • Has around 6.75 million active users

Deliveroo

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There are food delivery apps that collect lists of delivering restaurants and connect users to them and there are those that fill in the last piece of the puzzle, delivering for restaurants that don’t do it themselves. Deliveroo, started in London in 2013, lets its users order from premium outlets that don’t traditionally have their own set-up and charges both the restaurants and the customer for the privilege. Restaurants pay a commission and users get charged a flat fee per order, but for good quality food, many are willing to pay.

Founder William Shu claimed in a recent Forbes interview that revenue has grown steadily at 20 to 25 per cent a month for the last three years. The latest funding round for the firm in November last year raised $100m, valuing Deliveroo at around $600m. The service runs in 30 cities in the UK and 20 international locations, including Dubai, Hong Kong and Sydney. The app lets users find restaurants that are close enough for a quick delivery and track their order once it’s gone through. Interestingly, customers can choose to order now or for some time in the future, giving the restaurant plenty of lead time and scooping up planned meals as well as spur of the moment takeaways.

  • Raised nearly $200m in funding so far
  • More than 300 employees and 5,000 drivers
  • Investors include Greenoaks Capital and Index Ventures

Conclusion

Apps like Grubhub show that food delivery was an early obvious avenue for tech startups, but latecomers like Deliveroo are proving that there’s still room in the sector for new innovations. With GPS-enabled mobile phones offering the opportunity for easy real-time logistics tracking, apps can map orders and make informed estimated delivery times. Using apps to connect local couriers with customers also lets food delivery apps make, and keep, promises about speedy delivery. Both these innovations increase these apps usefulness to corporate clients, who need accurate delivery times for tightly scheduled lunches. Although the sector is likely to continue to see consolidation among the big players, there’s still plenty of space of newcomers using cutting edge technology to carve out a niche.

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