- The business consistently maintains over 60% growth in GMV despite having already reached a €7.4 billion of GMV, which is ~1.5x that of Grubhub in the US.
- It has a massive international delivery operation network across 44 countries, which is very costly to maintain.
- In 2019, the cost of sales overgrew the revenue, which already doubled YoY. The business appeared to have a major difficulty in realizing operating leverage.
- It also consistently burns hundreds of millions of Euro every year to sustain its aggressive growth.
- Emerging markets will be central to its growth story. Initially started in Berlin, it already sold its German operations for €487 million in 2019.
The Berlin-based Delivery Hero (OTCPK:DLVHF) is an ambitious growth story in the global online delivery space. It operates a massive food delivery business across Europe, MENA, Asia, and the Americas. In 2019, the company recorded a ~€7.4 billion of GMV (Gross Merchandise Value) and 666 million of orders, which represent a staggering 68% and 80% YoY growth respectively. Considering its exposure to fast-growing emerging markets, there are untapped opportunities that will enable the company to grow its market share further. However, the "growth at all cost" approach has its mix of good and bad. The business has been consistently burning hundreds of millions of Euro each year with no visible path to profitability.
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