Germany’s Delivery Hero, one of the biggest food delivery firms in Europe, has taken a major step into the highly competitive Southeast Asian market by agreeing to buy Woowa Brothers, the owner of South Korea’s most popular food delivery app.
The deal, which the companies announced last Friday, values Seoul-based Woowa at US$4bn (€3.6bn), with Delivery Hero acquiring an initial 88% and the understanding that it will take 100% ownership of Woowa over the next four years.
In the meantime, Woowa founder and CEO Bongjin Kim will become chairman and executive director of a new joint venture that will be based in Singapore and tasked with competing with regional rivals like SoftBank-backed Grab and Indonesia’s Go-Jek.
Woowa already operates in 11 countries and, since its launch in 2010, has grown its customer base to more than eight million monthly active users. In addition, its Baedal Minjok app is the largest in South Korea, which has become the world’s fourth-largest market for online food delivery.
The company generated 365 million orders over the 12 months to the end of September 2019, yet Delivery Hero has spotted further opportunities because the majority of Korean consumers still order food over the phone.
“We are excited to enter into a strategic partnership with Woowa Brothers, which is at the forefront of innovative technological services and has put Korea on the map in the global online food delivery industry,” said Niklas Ostberg, CEO of Delivery Hero.
“We fully support Woowa Brothers to continue making investments and innovate for the benefit of the wider industry participants, including consumers, restaurants, employees and riders.”
Bongjin Kim, CEO and Founder of Woowa, added: “The Korean food delivery market is still in the very early stages of development, and offers vast opportunities to grow the customer base and expand into adjacent on-demand services.
“We are excited to partner with Delivery Hero to leverage their platform and global expertise to facilitate expansion in Asia, as well as to further penetrate the high-potential Korean market.”
Sourced from Delivery Hero, Woowa; additional content by WARC staff