Delivery Hero already has a strong business in South and Central America.
(Photo: dpa)
Hamburg Delivery Hero buys in Central America: The Dax group has agreed to take over the Hugo app, which is particularly strong in the Caribbean, announced the Berliners on Thursday morning. They did not provide any specific information about the purchase price. “We are thrilled to expand our strong presence in Central America,” said CEO Niklas Östberg. Above all, the takeover will give momentum to the growing business with the fast delivery of supermarket items.
Hugo is reportedly active in Guatemala, El Salvador, Honduras, Nicaragua, the Dominican Republic and Jamaica. The company has 800 employees and 1.3 million registered users. The app combines several offers such as the delivery of food from restaurants, supermarket items and medicines, but also financial services, taxi services and even laundry services.
The service was founded in 2017 by Alejandro Argumedo in El Salvador as a delivery app for food and drinks from restaurants. In Hugo’s self-portrayal, it is said that Argumedo’s drive is to put El Salvador on the international “innovation radar”.
Delivery Hero plans to close the transaction in the first quarter of 2022 if the cartel watchdogs approve. Hugo assesses the purchase price on the basis of an expected mediated sales volume of 150 million dollars. The multipliers used correspond to those of the evaluation of Delivery Hero. The group expects brokered sales of around 33 to 35 billion euros in 2021 and is currently worth almost 27.6 billion euros on the stock exchange. Based on a similar valuation, Hugo would be worth just under $ 185 million.
Top jobs of the day
Find the best jobs now and
be notified by email.
Delivery Hero already has a strong business in South and Central America. The group had already started with a takeover in Uruguay and Argentina in 2014. In 2020, the Berlin-based company took over the South American business of the Spanish delivery app Glovo for up to 230 million dollars.
In the first half of 2021, sales of 226 million euros came from the region – an increase of 139 percent. The adjusted operating loss (Ebitda) there was 80 million euros. Delivery Hero brokered goods worth 884 million euros in the region: the figure shows that the acquisition there is comparatively small.
For Delivery Hero, takeovers are part of the strategy to achieve market leadership in many countries. Buying in the Caribbean could help here.
More: The strategy behind Delivery Hero’s aggressive growth