Delivery Hero announced today that it has has agreed to buy South Korean food delivery rival Woowa Bros. for $4 billion, according to an article published on The Wall Street Journal.
Berlin, Germany-based Delivery Hero is one of the largest restaurant food delivery companies in the world, operating in over 40 markets across Europe, Latin America, Asia, and the Middle East. But in South Korea, Woowa Bros. is even bigger, with its Baedal Minjok service holding a 75 percent share of the food delivery market. The company also builds its own food delivery robots (for which it raised $320 million in 2018) and is an investor in restaurant robotics company Bear Robotics.
Currently, Delivery Hero’s Yogiyo food delivery app ranks second behind Woowa Bros.’ Baedal Minjok service in South Korea. The consolidation of the two companies means Delivery Hero will gain an even wider reach in Asia and especially South Korea — the world’s fourth-largest market for food delivery.
Competition in that market is fierce but rapidly consolidating. Even with 10 million active users in Korea, Baedal Minjok is still competing with e-commerce company Coupang, which is backed by SoftBank and launched a food delivery service this year. It will not, however, go toe-to-toe with Uber Eats, which shuttered its business in South Korea in September citing “competitive pressures.” The deal with Delivery Hero will be a boost for Woowa Bros. and also give Delivery Hero access to more potential users. It will also intensify competition within the food delivery space even more.