London-based food delivery service Deliveroo has released its half-yearly financial update to investors and there's good news and bad news. The good news is that revenues are up, the bad news is, so are the losses.
Citing “challenging market conditions”, the company reported a pretax loss of $178 million for the first half of this year. To put this into perspective, this is up 54% from last year.
Operational in 11 markets globally, the UK, France, and Italy appear to be the breadwinners for the company, while others, the Netherlands in particular, have never really caught the hearts and souls of locals.
Facing stiff competition from home country rival JustEat, after six years of operations, the Dutch market represents only 1% of Deliveroo’s gross transactional value, and the company has determined, “that it would require a disproportionate level of investment, with uncertain returns, to reach and sustain a top tier market position, and therefore has decided to consult on ending its operations in the Netherlands.”
Deliveroo will begin winding down operations and plans to officially turn the lights off and lock the doors by the end of November.
Speaking to the overall health of the company, Deliveroo CEO Will Shu commented, "Deliveroo is committed to delivering profitable growth. We are focused on driving the business to the milestone of adjusted EBITDA profitability and then on to positive free cash flow generation. In March we set out our path to profitability and the levers to deliver this. So far in 2022, we have made good progress delivering on our profitability plan, despite increased consumer headwinds and slowing growth during the period. We are confident that in H2 2022 and beyond we will see further gains from actions already taken, as well as benefits from new initiatives."