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Deliveroo, the online delivery service that brings restaurant food to your door, has raised £16.5m

The London start-up is set to expand across the UK

Oscar Williams-Grut
Thursday 29 January 2015 10:31 GMT
The company delivers food from 750 restaurants
The company delivers food from 750 restaurants (Rex )

A London start-up that delivers Nando’s and Gourmet Burger Kitchen to your door has raised $25 million (£16.55m) to bring its upmarket takeaway service to more cities across the UK.

Deliveroo, founded in 2013, has a network of 300 freelance drivers across London who deliver food from 750 restaurants including Honest Burger and Barnyard on Charlotte Street. Customers order through the start-up’s app, with delivery taking an average of 32 minutes.

Former hedge fund worker Will Shu had the idea for the business while working in the City. Shu said: “When I was transferred from New York to London in 2004, the first think I realised was it’s impossible to get good quality food delivery. I was working really late hours in Canary Wharf and every day I’d end up walking to Chili’s – it was pretty depressing.”

Since launch, over 50,000 people have used the service and 80 per cent people who sign up use it more than once. Shu said return customers order a takeaway on on average every 21 days.

Sundays are Deliveroo’s busiest days, despite this traditionally being the quietest day for restaurants. Shu said: "What we notice is people’s choices tend to be unhealthiest – a lot of burgers. On Monday’s what we see is a lot of salads and cold press juices, that sort of thing."

As part of its fund raising Deliveroo will be expanding into Manchester this week, with launches in Oxford, Reading, Birmingham and Leeds to follow. Shu said the start-up was also looking at expanding to Western Europe within months, although he said exact locations have not yet been decided.

The business faces stiff competition in the takeaway market from the likes of Just Eat, Hungry House and Eat First but Shu stressed Deliveroo was about quality as opposed to simply convenience. He said: "It’s important to highlight the difference between our business and the likes of Just Eat and Hungry House. For us they have to be a quality restaurant, that’s the most important thing."

The start-up, which employs 50 people, uses a software platform to process all its orders and the $25 million has come from venture capital firms that traditionally invest in technology. Accel Partners, which has in the past backed the likes of Facebook and Spotify, has invested alongside previous investors Index Ventures, which has invested in Asos, Just Eat and Dropbox, and Hoxton Ventures.

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