Food delivery startup Deliveroo expands with Business tier for corporate accounts
Fresh from raising $275 million this August at around a $1 billion valuation, Deliveroo is now taking the next step in its bid to corner the market in Europe and other markets for high-end, high-concept restaurant food delivery; and turn the Deliveroo business profitable in the process. The startup is launching a new service catering specifically for the corporate market, Deliveroo for Business, which lets companies create corporate accounts with customised settings to control how their employees can use the app to order food at the office.
The service is going live in all across the 100 markets where Deliveroo is active, the company said.
Early customers that are already using the service include the European offices for Eventbrite and Survey Monkey, as well as Innocent Drinks and British Land. “Deliveroo has already gained the loyalty of the world’s largest banking, law, media, and technology firms due to their ability to provide a uniform service across the globe,” the company said.
Deliveroo’s decision to move into the business market is much like Uber’s move in 2014 to launch Uber for Business.
At its most basic, it is playing to how people are already using Deliveroo (and competing services) today. There are already many people ordering food to be delivered to offices during the day, as well as after hours, with much of that food getting expensed. Deliveroo has created a product that will help companies get that practice under some kind of control, which could also potentially mean that Deliveroo starts to get used more regularly in those business environments, too.
“We’ve seen huge demand for delivery to offices and work spaces, with a huge amount of variation and choice delivered to each one,” said Christine Oddy, who heads up Deliveroo for Business. “We wanted to provide a comprehensive service for businesses to operate this offering to employees and clients with minimal admin for the company.”
There are a number of food delivery services that Deliveroo competes against today, from established players like Just-Eat and Delivery Hero (and their many affiliate brands) that offer a range of takeaway options, through to newer entrants that are aiming very much at the same market as Deliveroo, like Amazon Restaurants and Uber’s UberEats.
And more directly in the area of catering meals specifically to business locations, there are local players like Rocket Internet’s CaterWings and the recently-launched City Pantry in the UK.
Deliveroo’s new business service essentially will bring together strands of all of these businesses: as you can do already on Deliveroo, users will be able to order from a selection of restaurants.
On top of this, companies can work with account managers to cater larger meals to their offices as well, targeting not only special events, but also businesses that do not have in-house cafeterias but would like to offer their employees the option of meals on-site.
The fact that this is a corporate service with a dedicated account manager and options to set different parameters for users, spend, time and geography implies also that Deliveroo will be charging a higher fee for Deliveroo for Business, which could also help the company with its overall margins.
And in Deliveroo’s case, margins are an especially important detail, considering that the company is not yet profitable globally; that the food delivery business is massively capital intensive; and that it is even more costly because of the heavy competition Deliveroo is facing.
Deliveroo would not comment on specific pricing for the service, except to note that it charges an administration fee for business accounts.
Another way that this will help with Deliveroo’s margins is that it’s adding another service to the company’s wider platform.
While Postmates in the U.S. has chosen to expand its business by way of deals with much larger suppliers (like Starbucks) and opening up its API for third-party businesses to tap into its logistics and delivery network, Deliveroo has grown by expanding the volume food and beverage products that it delivers itself.
That’s led it to launch and run a B2B remote kitchen service called RooBox, giving restaurants access to delivery-only kitchens high density locations; and a new feature for alcohol delivery.
The company is not disclosing any revenue figures except to note that revenues have grown 400 percent since November 2015 and that it is profitable in several (but not all) of its markets. The company today is live in 12 countries: Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, United Arab Emirates and the United Kingdom.