Doordash’s stock soared more than 14 percent on Wednesday after the food-delivery giant announced an $8 billion deal to buy a European-based rival.
The largest food delivery service in the US said Tuesday that it will acquire seven year-old Wolt Enterprises Oy of Helsinki, Finland in an all-stock deal — its largest acquisition to date.
The tie-up comes on the heels of competitor Grubhub’s acquisition by Amsterdam-based Just Eat Takeaway.com, which completed its $7.8 billion purchase of the Chicago-based company in June.
The Wolt deal gives San Francisco-based Doordash a much needed boost abroad, where it will gain access to the 23 countries, including Germany, Japan and Israel.
“By joining forces, we believe we will accelerate our product development, bring greater focus to each of our markets, and improve the value we provide to consumers, merchants, as well as Dashers and couriers around the world,” Doordash chief executive Tony Xu said in a statement.
“This should allow us to invest and expand more efficiently than we could have done on our own and on a faster timeline,” he added on a conference call with investors.
Wolt co-founder and CEO Miki Kuusi will run DoorDash International and report to Xu when the transaction closes, likely in the first half of 2022.
The focus on international expansion comes as domestic regulatory pressures have been mounting on the delivery apps — including Doordash, Grubhub and Uber Eats. A number of US cities, including New York and San Francisco have passed measures to cap the commissions these companies charge restaurants among other initiatives.
Those include a bill being introduced on Wednesday by the New York City Council the apps to reimburse their delivery workers for any costs associated with crashes. Doordash already provides some liability coverage.
Separately, Doordash reported that its revenues grew 45 percent to $1.26 billion in the quartered ended Sept. 30, beating Wall Street expectations. The growth was fueled, in part, by Doordash’s non-food related partnerships with such retailers as Bed Bath & Beyond and Total Wine.
Some 12 percent of the company’s customers are now using non-restaurant delivery, up from just 1 percent at the beginning of the year, Xu said on an earnings call.
At the same time, Doordash’s net loss widened to $101 million in the quarter compared to $43 million a year ago.