How the 27-year-old CEO of delivery app Glovo targeted Uber Eats' weak spots to hit a $1 billion valuation
- Spanish delivery startup Glovo has raised $167 million in a fundraising round led by Mudabala, the Abu Dhabi sovereign wealth fund.
- Glovo competes with Uber Eats in some European markets and data suggests it is beating the company in Spain and Italy.
- The raise makes Glovo the latest startup to reach "unicorn" status, pushing its valuation beyond $1 billion.
- Founder Oscar Pierre, 27, told Business Insider his company had found success by targeting markets off its competitors' radars, in areas of north Africa and eastern Europe.
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Glovo, the Spanish delivery startup, is the latest firm to reach a $1 billion valuation, after raising €150 million (around $170 million) in a fundraising round led by Mubadala, the Abu Dhabi sovereign wealth fund.
The company is one of many food delivery services operating globally, but one that has consciously chosen to target markets off the radar of industry giants like the UK's Deliveroo and Uber Eats, such as Kenya, Ukraine and Peru.
This is the first investment it has received from Abu Dhabi's Mubadala fund, which contributed to SoftBank's first Vision Fund and raised a $400 million European tech fund in 2018.
The food delivery market itself is worth an estimated $35 billion globally - and predicted to hit $365 billion in a decade.
Since founding Glovo in 2015, CEO Oscar Pierre has expanded operations to 288 cities in 26 countries, with a sharp focus on territories in eastern Europe, north Africa and South America.
The firm currently employs 1,500 people globally, and recently entered the Polish market, acquiring Pizza Portal in a $40 million deal.
Data from UBS in 2018 indicates that Glovo is beating several bigger rivals in terms of app downloads in Spain and Italy, and that it's share is growing.
Speaking to Business Insider, Pierre said he hoped Glovo will become the app customers use to get "any product at any time". At present, users can already order food to go, as well as items from the supermarket or pharmacy. "Around 80% of our business is food delivery," he said. "Then it's groceries, pharmaceuticals, drinks, flowers... Whatever you can think of, really."
The online food delivery business is highly competitive.
Earlier this year, Just Eat and Takeaway.com announced plans for a merger after it was revealed both had suffered a dent in their profits. Meanwhile Uber is reportedly planning to sell off its delivery business in India for $400 million to a local rival. And the UK's Deliveroo is facing competition concerns over a $500 million investment into its business led by Amazon.
Glovo intentionally used its smaller resources to target markets ignored by competitors
Speaking about how Glovo differentiates itself from its competitors, Pierre said: "It can be a bit of a cliche but it's all about the execution. We've always had fewer resources and fundraising hasn't been easy for us. But we chose the markets we wanted to engage with very well, I think - places that perhaps Uber Eats and Deliveroo did not see as priorities."
The company now intends to invest a large chunk of the $167 million raised into hiring another 300 engineers by the mid-2020s, with 40 dedicated engineers and 50 experts in its new tech hub in Warsaw.
Asked how the Mubadala investment came to fruition, Pierre said: "We were introduced to them by an investor of ours. One of the things we really liked about them is that they clearly take a very long-term view."
He added: "From day one, all of the conversations with them involved what we hoped to achieve in the next five years, the next ten years. They have the kind of capital which means they can be counted on to help their portfolio companies keep growing.
"To have achieved unicorn status is something truly exciting and a testament to the talent within the company."