Hamburg The founder of the delivery service Wolt struggled to explain his latest U-turn on Wednesday. “Yes, a few months ago I would have very likely ruled out a sale,” admitted Miki Kuusi – in a call that was precisely about this: the takeover of the most dynamic European delivery service by its US counterpart Doordash. For seven billion euros in shares, Kuusi gives up his ambitions to become an independent European player on the world market. That means: Wolt will not go public.
Two things sweeten the sale for Kuusi: On the one hand, he will become CEO of Doordash’s international business. Since the Californians have so far been active almost exclusively in the USA, this basically includes the 23 Wolt countries. On the other hand, Doordash is providing half a billion euros holding bonuses for Wolt management.
The 32-year-old Finn himself explained the move differently: Together, both partners would have the best chances on the world market. Doordash boss Tony Xu approached him a month ago. “I didn’t think much of it at first,” said Kuusi – after all, both of them have been friends for a long time. However, one thing quickly became clear: “Together we can form one of the most important players in our industry.”
The deal brings together two partners who entered the delivery market relatively late. Doordash from San Francisco has existed since 2013. Kuusi and his colleagues founded Wolt a year later in Helsinki. In the local start-up scene, Kuusi is also a big name as a co-founder of the “Slush” conference, which is now known throughout Europe.
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Both companies combine that, as laggards in the market, they could learn from each other’s mistakes, said Kuusi. The dropout has been emphasizing for years that Wolt can therefore work particularly efficiently and, thanks to better route planning, optimize costs and service at the same time.
Key role in internationalization
In the future, Kuusi Doordash wants to enrich his knowledge for international expansion. Because of its small home market in Finland, Wolt understood from the outset how to tailor its expansion to different countries – for example with local customer support and dealing with different legal systems, Xu praised his new manager. The Wolt brand should be retained and form the core of Doordash’s international expansion.
Kuusi will therefore play a key role in the company, which has been listed on the stock exchange since the end of 2020. After all, there is predatory competition among the major delivery services raging around the world, which is fought out in the local markets. At the same time, global size is increasingly becoming the decisive factor for stamina. Almost all providers are currently expanding their range from restaurant deliveries to goods from stores of all kinds as well as the fast delivery of supermarket items from their own stores.
Takeovers for internationalization are the order of the day in the delivery industry. Last year, the Lieferando parent company Just Eat Takeway bought the US provider Grubhub for 7.3 billion dollars. The Dax group Delivery Hero paid 5.7 billion euros in the spring for the South Korean provider Woowa, which is to become the core of the Asian business.
In Europe, Germany is becoming the central competitive field. Delivery Hero, Uber Eats and Wolt are challenging the previous quasi-monopoly Lieferando in the restaurant business, while young providers such as Gorillas and Flink are developing entirely new delivery options for supermarket items.
Wolt founder Kuusi also remains responsible for the German market. Last year Wolt started in Berlin, most recently in Hamburg. It is still unclear what role the Berlin express delivery service Flink will play in the group. Xu confirmed that Doordash is contributing $ 400 million to its latest $ 600 million funding round.
Well-known names among Kuusi’s donors
The deal is paying off for Kuusi’s investors. According to “Crunchbase”, the Finn has raised a total of over $ 822.5 million in venture capital so far. Donors include well-known names such as Tiger Global, Iconiq, Coatue, EQT and KKR. The Berlin multiple founder Lukasz Gadowski, who co-founded the competitor Delivery Hero ten years ago, is also present with a smaller sum. In mathematical terms, the investor’s commitment has increased by a factor of 8.5 on average. The early donors are likely to have achieved particularly high returns.
However, the Wolt owners will only hold a minority in the entire group. Before the deal became known, Doordash was worth almost $ 65 billion on the stock exchange – significantly more than Wolt with his 4,000 employees. The Europeans achieved sales of 345 million euros in 2020 – a threefold increase. The net loss was 45 million euros.
In the first three quarters of 2021, Doordash posted a pre-tax loss of $ 310 million on Tuesday’s sales of $ 3.59 billion. The US group thus grew significantly – both in terms of sales and losses.
The deal was well received on the stock market: Doordash shares rose significantly. “With Doordash as an investor behind us, Wolt will be able to expand significantly faster and exert even more pressure on established competitors,” predicted DZ Bank analyst Manuel Mühl.
More: Doordash buys Wolt