Uber Technologies announced Tuesday that it will buy the Taiwan unit of Delivery Hero’s Foodpanda for $950 million in cash. The deal is part of Uber Eats’ strategy to expand in Asia, specifically by strengthening its position in Taiwan. On the other hand, it also underscores Delivery Hero’s ongoing retreat from that same market: the sale is coming at the same that Delivery Hero has trying to sell off a package of its other operations across Southeast Asia.
As part of the transaction, Uber is also taking a stake in Delivery Hero. It will purchase $300 million in newly issued ordinary shares of the Germany-based business, which operates food delivery services around the globe.
The deal, one of the biggest cross-border acquisitions out of Taiwan, will be completed in the first half of 2025, Uber said.
After it closes, Foodpanda’s local consumers, merchants, and delivery partners will be transitioned to Uber Eats, per the statement.
Uber Eats and FoodPanda dominate the food delivery market in Taiwan. According to a recent report, from January 2022 to August 2023, Food Panda led the market with 52% of the market share, while Uber East had 48%. Other food delivery players, such as Foodomo and a plethora of other fast food delivery apps, respectively account for less than 2% and 6% of Taiwan’s market share.
“Taiwan is a fiercely competitive market, where online food delivery platforms today still represent just a small part of the food delivery landscape. We’re so excited about the opportunity to deliver even greater convenience and value that this transaction would unlock in the years ahead,” said Pierre-Dimitri Gore-Coty, senior vice president of delivery at Uber.
Uber said synergies from the deal are expected geographically. “Uber’s wider selection across northern Taiwan and in major urban centers with Foodpanda’s comparative strength in southern Taiwan and smaller cities,” it noted.
Taiwan’s online food delivery market is projected to reach around $68.5 million by 2029, up from $51.3 million in 2024.
Food delivery has seen a lot of ups and downs as a wider market: unit economics and a struggle to reach better economies of scale in competitive markets have led to a lot of consolidation and once-globally-ambitious players retreating to home markets for the moment.
This has played out in an especially painful way in the “instant grocery” market. Collectively, billions of dollars of fundraising from a wide number of investors have been wiped out as startups fold or get acquired by bigger players, sometimes for pennies on the dollar. Then those bigger players themselves downsize, as in the case with Getir in April.
Taiwan has a well-established food delivery industry across a concentrated topography, making it an “attractive” market for Uber, analysts at Bernstein note.
“Top-down, GDP/capita levels are good versus Asia broadly, and Uber Eats is well positioned,” Bernstein’s analysts write, adding that Taiwan’s business funnel is especially strong, with an average of seven monthly orders per user, versus the 3-5x that Bernstein said it typically sees in delivery markets. That also means it leads membership contribution in gross bookings, too.
Meanwhile, Delivery Hero said that the plan is to focus its foodpanda business on other markets.
“The strength of our Taiwanese business is a testament to the hard work of many teams over the last eight years,” said Niklas Östberg, CEO and co-founder of Delivery Hero. “In order to build a world-leading service, we have come to the conclusion that we need to focus our resources on other parts of our global footprint, where we feel we can have the largest impact for customers, vendors and riders. This deal gives foodpanda an exciting runway in Taiwan and we wish them all the best in their next chapter.”
In February, Delivery Hero, attempting to downsize in Asia, terminated talks with an undisclosed third party regarding the potential sale of foodpanda in selected Southeast Asian markets: Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar, and Laos. Delivery Hero’s food delivery division competes with Grab in Southeast Asia. Foodpanda’s partial sale talks fell through in the wake of its September layoffs, aimed to streamline operations.
