In case you hadn't noticed, there's renewed appetite from investors across the globe in companies facilitating the online ordering of food prepared and delivered by partner restaurants.
US-based GrubHub raised almost $200 million in its IPO last month, and currently boasts a $2.5 billion market cap. More venture capital is finding its way to local competitors, too.
In Europe, things are heating up quickly as well, enough reason for us to take a look at the online food-ordering category in these parts, and size up the major and upcoming players. We took a particularly close look at Germany, where an all-out takeaway ordering battle rages.
Fierce competition
UK-based Just-Eat, one of if not the biggest online food ordering companies in Europe, just went public at a valuation close to GrubHub's. Rival Takeaway.com, based in The Netherlands, just raised 74 million euros ($103 million) in Series B funding and acquired Lieferando.de, one of the largest food delivery websites in Germany. It had earlier raised a 13 million euro round in 2012.
Germany is also where originated another competitor, Delivery Hero, an upstart that has raised about $260 million in funding to date (a large chunk of which this year alone).
Also in Germany, Rocket Internet-backed venture foodpanda/hellofood says it's growing fast, having spread to 40 countries in a mere 22 months after launching. So far, the Berlin company has raised $48 million in capital (but I wouldn't be surprised to see it get another cash infusion soon). Germany is clearly a rapidly-heating battleground for online food ordering sites, too, with self-financed Pizza.de (founded in 2007) holding its ground and combatting its well-funded rivals with brio - at least so far.
On a European level, another one to keep an eye on is Denmark's E-takeaway, which is also self-funded and quietly but surely expanding all over the globe.
By the way: it shouldn't be much of a surprise to see the major players originating from the countries in Europe where food delivery is most prevalent (UK, Germany, The Netherlands and Denmark).
Nevertheless, in big markets, local players are staking their claims - for examples, look no further than Russia's Delivery Club (which just raised $8 million) and Turkey's Yemeksepeti / Foodonclick, which secured $44 million from General Atlantic and Endeavor Catalyst in September 2012.
Dutch entrepreneur Jitse Groen (pictured), who founded Takeaway.com in the late nineties with a starting capital of exactly 50 euros and has managed to grow it into one of the dominant players in the space, posits that having a leading position in one country isn't all that impressive, however:
"Being number one in a certain country doesn't really mean anything if you want to expand. To make it really big in this industry, you have to strive to become dominant and profitable in a good number of key markets," Groen says. "Being number two, even in a seemingly large market, significantly lowers your chances of booking meaningful profits."
A relatively old category
One thing that's important to note that it's a bit of stretch to label all of the above 'startups'. Groen founded Takeaway.com in 1999; Yemeksepeti was started in 2000 while Just-Eat and E-takeaway first saw the light of day in 2001. One of the oldest ones is actually France's Alloresto.fr (1998), but it has since become part of Just-Eat (acquiring smaller, local competitors is a straight-forward and oft-used instrument for growth for a lot of online takeaway ordering enablers).
Clearly, the challengers are the younger, nimbler rivals such as Delivery Hero and foodpanda, both of which are very aggressive in positioning their services in Germany and other key regions in Europe, spending top dollar on marketing and media presence.
Delivery Hero co-founder and CEO Niklas Östberg (pictured) says there's more to it that just marketing, though:
"We operate in 14 markets across four continents and deliver more than 5 million meals globally every month - the equivalent of 1 order per second," Östberg boasts. "We have a lot of innovation planned and ahead of us. We hope our competitors will be able to keep up with the pace."
Östberg also added that, in the end, the increased interest of investors in fast-growing companies in this space ultimately benefits the health of the sector, restaurants and customers.
Sizing 'em up
Fighting words from Delivery Hero, which has just managed to steal away the CEO of now Takeaway.com-owned Lieferando to head its Germany subsidiary, Lieferheld.
Dutchman Laurens Groenendijk (pictured), a veteran of the space who sold his company to Just-Eat and stayed on as an executive up until two years ago, says his former employer is still the one to beat, though.
"I think Just-Eat is in great shape, as they’re market leader in more than 10 countries. They will reach break-even in more countries as the market matures, and it helps being the dominant player in the second-largest takeaway market in the world - the UK," Groenendijk says. "It's a no-brainer that they still have a lot of room for growth."
Just-Eat says it processed more than 40 million orders in 2013, with over 36,000 takeaway restaurants signed up to its system today. Takeaway.com, meanwhile, says on its website that it works with more than 25,000 restaurants, and seeing an average of 800,000 orders per month.
Delivery Hero may be among the new kids on the block, but Östberg claims already over 60,000 restaurants have become part of its network, which spans 14 countries. Fellow German online takeaway site foodpanda has signed up 22,000 restaurants to date, according to a recent press release.
Conclusion
It's no surprise to see online food ordering sites growing fast all around Europe, with an increasing penetration of Internet connections and smartphones across the board, more restaurants and improved convenience of ordering thanks to better search, applications and more payment methods.
So far, the ones who were started around the start of the new millennium have been holding up well against smaller, more local competitors, but the latter are poised to grow fast thanks to significant capital injections and an increased spend on marketing.
No doubt it will be very interesting to see if the battle between the ordering sites, and particularly the one that currently rages in Germany, will play out as the market continues to mature.
The real elephant in the room, several people I spoke with pointed out, is that the main competitor of all of the above remains the telephone, still the preferred way to order food for many Europeans.
I wouldn't bet against the continued growth of online ordering, though.
(The amazing illustration above made by the equally amazing Dana Zemack > Twitter)
