Deliveroo Rival Glovo Raises $528 Million for Grocery Delivery
(Bloomberg) -- Glovo, the Spanish delivery app, has raised 450 million euros ($528 million) in a fundraising round that will help it expand its quick-delivery service and grocery operations in Europe.
U.S. investors Lugard Road Capital and Luxor Capital Group led the round, which also included investments from German delivery app Delivery Hero SE, Drake Enterprises and GP Bullhound, the company said in a statement on Thursday.
Glovo will use the funds to expand its Q-Commerce unit, which is responsible for grocery and retail deliveries as well as “dark stores,” which are small warehouses that let Glovo quickly fill orders for goods from particular retailers. It’s a similar strategy to dark kitchens, which can produce food for take-out in neighborhoods where a restaurant wouldn’t be viable. In the biggest cities where Glovo operates, the company said it can make deliveries within 10 minutes using the Q-Commerce network.
The deal comes at a challenging time for delivery apps as investors begin to question whether they can sustain growth rates that surged during Covid-19 lockdowns when shops and restaurants were closed. Deliveroo Holdings Plc plunged on its first day of trading in London on Wednesday as investors expressed concerns about the status of its more than 100,000 gig workers. The Spanish government has proposed changes to its labor laws that would force companies like Glovo to offer wages, social security and unemployment benefits to its couriers.
In March, the Spanish labor ministry agreed with unions and trade groups to push ahead with new rules to force food delivery apps to hire riders, in what is considered one of the toughest rules for gig-economy workers in Europe. There’s no date yet for the government’s cabinet to approve the executive decree that will establish the regulation.
Glovo didn’t disclose its valuation. The company said it had reached “unicorn status” with a valuation more than $1 billion when it raised 150 million euros in December 2019. The company raised 100 million euros in a deal with Swiss real estate firm Stoneweg SA in January to expand its Q-Commerce network.The company aims to have 200 dark stores by the end of the year, up from around 20 at the beginning of 2021.
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