Amazon’s Minority Stake on UK Startup Goes Ahead
One of the most welcome contributions of modern technology to everyday life is the convenience of online food delivery.
Amazon finally gets a green light on its investment to the UK’s online food delivery startup, Deliverloo. The approval of the e-commerce behemoth’s bid to buy 16% stake of the company came after more than a year of chase with UK’s competition watchdog, Competition and Markets Authority (CMA).
In May of 2019, Deliverloo disclosed that the technology giant led in raising its $575 million rounding funds. The information raised CMA’s sensors, followed by a request to halt the investment in July 2019. Formal investigations started before the year ended.
Among CMA’s top concerns is the deal having the potential to prevent Amazon from reentering the online food market after shutting down its Amazon Restaurants venture last year. The consumers will likely receive the reduced competition’s fallbacks through having limited choices and price manipulation, among others.
UK’s competition regulator reconsidered its stance after Deliveroo stated that it undergoes financial hardship that could drive it out of business, brought by lockdowns. Although, the company bounced back in sales in April 2020 as quarantine restrictions started to ease.
The deal originally planned to pull through in June, faced further delays due to the pandemic.
The regulator anticipated Amazon’s prospects to have a bigger bite and warned that acquiring a more significant share of the online food delivery company will trigger another painstaking probe.
What’s with Bezos’ Entry
The grilling of Bezos on monopolistic behavior accusations surrounded the technology news last week. But the tech biggie bounced back fast, with the approval of his company’s bid.
The investment is fantastic news for UK consumers, including the British economy itself, Deliverloo said. This will increase variety and choice for consumers, better sales traffic for restaurants, and increased flexibility of work for riders. These benefits are just some of the things to come with the company’s expansion.
CMA defends that the deal would not take away the competition, both in restaurant delivery and convenience grocery delivery. Thus, Domino’s appeal claiming the foregoing is dismissed.
Early-stage investors of the online food delivery enterprise, Accel, and Index Ventures, expressed their frustration about the delay. Still, they are delighted now that the future of the company’s expansion is guaranteed, with the giant’s entry.
CMA’s 15-month investigation has already given the technology biggie a good run for its money, and now is the time to get the investment moving.
Deliveroo was launched in 2013 and is a direct competitor of Uber Eats. The company operates in different global markets, notably in Europe, Australia, and Asia.
