Glovo, a Barcelona-based startup, has reached a milestone of becoming a business ‘unicorn’ after Abu Dhabi’s wealth fund, Mubadala, invested $167 million in it. The startup company that is known for food delivery has crossed the capital valuation of $1 billion after the investment. With this investment, the company plans to expand its operation in other countries.
Glovo’s Expansion Plan
The four-year-old company has recently expanded its delivery service to other categories ranging from groceries to pharmaceuticals besides food items. According to Glovo’s CEO Oscar Pierre, “The extra cash will be used to help Glovo grow its workforce with plans to hire 300 new engineers and developers by mid-2020.”
As Pierre continued, the additional capital would help the company expand into new territories next year. Glovo has already set up its production unit in Poland after it acquired the country’s local operator, Pizza Portal. Pierre further added, around 40 engineers with 50 technical and product experts would be working at its new office in Warsaw.
Apart from Mubadala, the sovereign fund of Abu Dhabi, the other existing investors such as Germany’s Delivery Hero, a Swiss investment company, Drake Enterprises, and European venture firm Lakestar contributed to the financial funding of Glovo. Referring to it as one of Europe’s growing companies, CB Insights reported, the firm is now Spain’s second start-up to achieve unicorn status after Cabify, which provides the ride service in the country.
Global Food Delivery Market
Food delivery service has been growing rapidly and is emerging as one of the most lucrative business sectors across the globe. US-based services such as DoorDash, Postmates, Uber Eats, and the UK-based Deliveroo and Just Eat have established an extensive network in the global food delivery market.
Glovo emerged as one of the European’s startup companies that made its place in the global competition. Glovo entered a deal with a French retailer Carrefour, earlier in 2019, which help it speed its fast home delivery. At present, Glovo has 50,000 couriers that offer an “on-demand” delivery service for a range of products under 30 minutes. Glovo’s app is now available in 26 countries across Europe, Latin America, and Africa.
Pierre told CNBC, “When we started the company we believed that the concept of on-demand had the potential to become a very big part of the way people purchase goods and services. Our vision, from day one, has been to become the ‘everything app’ for city living, giving our customers access to anything they wish to purchase, and then delivering it.”
However, Pierre claimed, “Glovo had actually reached operational profitability in its home market of Spain, though the overall business remains loss-making.” Referring to the possibility of its expansion into the tech sector Pierre commented, “It’s not a priority for Glovo right now and not something we’re thinking about.” Replying to a question regarding the plan for expansion Pierre explained, there are no immediate plans to expand into the Middle East but he stated, “We never say never.”
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