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UPDATE 1-Delivery Hero CEO says needs capital for possible buys
April 24, 2017 / 4:10 PM / 7 months ago

UPDATE 1-Delivery Hero CEO says needs capital for possible buys

(Recasts with CEO interview)

BERLIN, April 24 (Reuters) - Online food takeaway firm Delivery Hero, one of Europe’s biggest start-ups, could consider an initial public offering (IPO) to raise capital so it can face competition from the likes of Uber.

“We should make sure that we are ready, that we can make further consolidation, that we have the power of an Uber or others,” Chief Executive Niklas Ostberg told Reuters.

The biggest international players in online food takeaway - Delivery Hero, Just Eat and Takeaway.com - have been raising fresh capital or swapping assets to bulk up as Uber and Amazon push into meal delivery.

Delivery Hero is seen as the start-up closest to going public in the portfolio of German e-commerce investor Rocket Internet, which reports 2016 results on Tuesday.

Rocket, which holds a 37.7 percent stake in the firm valued at almost 3 billion euros ($3.3 billion), has seen its share price tumble as valuations of its other holdings have been slashed in recent financing rounds.

Ostberg made the comments after Delivery Hero reported that 2016 sales rose 79 percent to 297 million euros, or 71 percent after accounting for disposals and acquisitions.

The Berlin-based company founded in 2011 has built a delivery network for 271,000 restaurants in more than 40 countries and Ostberg expects it to keep up strong growth in 2017 and in the medium term.

Ostberg declined to give figures on how much the business lost in 2016, but said its core marketplace business had turned profitable during the year, although its Foodora logistics unit and recently-acquired Foodpanda were still losing money.

Ostberg told Reuters he did not expect Foodora and Foodpanda to turn a profit any time soon but said the main business should generate enough profit to fund their expansion until they break even.

$1 = 0.9215 euros Reporting by Emma Thomasson; Editing by Harro ten Wolde and Edmund Blair

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