Delivery Hero has taken out a big eight-figure loan.
The German food delivery company announced the new funding via email on Thursday after German-language publication Manager Magazin reported on the existence of the loan.
Delivery Hero isn’t revealing the exact size of the deal, but company spokesperson Bodo Braunmühl told Business Insider it is between €50 (£43 million) and €99 million (£85 million).
The unnamed investor is not receiving any equity in the company — making this a traditional loan, rather than a venture capital investment, and according to Manager Magazin, it has some steep terms attached to it: Delivery Hero will reportedly be making monthly payments of €500,000 (£431,000).
Braunmühl declined to provide any details about the terms of the loan, but in its announcement, Delivery Hero said that “the capital was raised with very good conditions, especially given a slightly more difficult capital market environment for start-up financing.”
Delivery Hero, launched in 2011, operates food delivery services in 33 countries, and employs more than 3,000 people, the company says on its site. This core business is profitable, the spokesperson said: The loan will apparently help to finance Foodora, a premium food delivery service that Delivery Hero bought from Rocket Internet (which bought a 30% stake in Delivery Hero in 2015) and which operates in 10 countries, mainly in Europe.
Manager Magazin reported that Delivery Hero CFO Emmanuel Thomassin called the loan “very expensive” in an internal email, and is asking employees to watch spending.
The loan comes at a time of significant upheaval and heavy competition in the food delivery industry. Deliveroo raised a huge $275 million (£209 million) funding round from VC investors after UberEats, Uber’s food delivery service, launched in London. Meanwhile, Just Eat and Takeaway.com have sold a number of local businesses to one another in various markets, in an apparent attempt to avoid additional competition.
Here’s the email Delivery Hero sent about the loan:
Delivery Hero Business Update for H1 / 2016
With more than 83 million processed orders in H1/2016 Delivery Hero is the global leader in online food ordering.
The number of processed orders in H1/2016 grew organically* by 45% compared to H1/2015. This positive trend continued in July with an organic* year-over-year order growth of 55%. This was our fastest organic growth as a group since 2013. Revenues during the first half of 2016 grew by 53%.
Additionally Delivery Hero’s core business is already operating profitably. At the same time, the company continues to invest heavily into its premium brand Foodora. Foodora’s growth continues to be extremely fast and the brand the brands financial development also remains above plan.
In order to further fund the fast growth of Foodora, Delivery Hero raised some additional capital – a high two-digit million amount. The capital was raised with very good conditions, especially given a slightly more difficult capital market environment for start-up financing.
Delivery Hero also maintains a very positive growth outlook for the rest of the year. Especially the strong position in very attractive regions drives the continuous fast growth of the group. The Turkish subsidiary Yemeksepeti, for example, continues to grow above plan and is reaching the threshold of 4 million processed orders per month.
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