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Deliveroo squares up to Just Eat with dramatic UK expansion plans

Deliveroo this evening announced plans for a rapid expansion in the UK, in a pivot that puts the firm on a collision course with rival Just Eat.
Some 5,000 more UK restaurants are to be added to the Deliveroo platform by the end of the year, increasing the London-headquartered firm’s current network of 10,000 partners by a half.
Deliveroo said it will “dramatically extend” its UK reach by, for the first time, allowing restaurants to sign up to its platform without committing to using its existing rider network. Outlets can continue to use their own drivers to delivery food.
The decision to mirror a model used by Just Eat follows the FTSE 100 firm’s own decision to deliver more meals itself. Historically, Just Eat has left the orders to be delivered by individual restaurants.
Deliveroo co-founder Will Shu said his ambition was for Deliveroo to be “a one-stop shop solution for all customers”.
“Today we are changing the game,” he said.
“We have seen Just Eat announce that they are going to operate in our space. So we are doing this to give the customer the best possible experience.”
Just Eat
Last month Just Eat passed 400m UK orders after gobbling up rival Hungryhouse. Orders rose by a quarter in the first three months of 2018 to 29.7m. Its recent acquisition contributed 1.4m transactions during the quarter.
RBC analysts said Just Eat sits “favourably” compared with “three-sided competitors, Deliveroo and Uber Eats”, with less than one in five customers overlapping.
Deliveroo raised $483m (?288m) in its two latest funding rounds in September and November from fund management powerhouses Fidelity and T Rowe Price – valuing the company at more than ?1.5bn.
Deliveroo squares up to Just Eat with dramatic UK expansion plans

The 'Roo-Pitch' at Deliveroo's London headquarters
Speculation persists that with almost $1bn raised from the private markets, Deliveroo will soon look towards a stock market flotation to fund further expansion.
Mr Shu said: “My ambition is to be a definitive food company. Whether that takes the path of an IPO or takes the path of us remaining private longer is not something I give much thought to.
“An IPO, I am not saying it is off the cards, it is not something we won’t consider; it’s just not now, we’re heads down in really trying to grow this business.”
Deliveroo currently employs 35,000 delivery riders worldwide, 15,000 of which are in the UK. Mr Shu said the firm will take on “thousands more” riders to satisfy the increased levels of restaurants on its platform. He said it was “difficult to say” how much revenue uplift Deliveroo’s latest plans would generate.
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