Delivery Hero’s years of global expansion are now under scrutiny. One of the company’s biggest investors is pushing the food delivery giant to sell assets and simplify its sprawling empire, arguing the current strategy has destroyed billions in shareholder value.
Delivery Hero is facing mounting pressure from one of its largest shareholders to accelerate a strategic overhaul that could include selling major parts of the business.
Hong Kong-based hedge fund Aspex Management, which holds about 9.2% of the German food delivery company, warned in a letter that it could push for leadership changes if the company fails to move quickly on a strategic review. The investor argued that Delivery Hero’s weak profitability and global sprawl had left the company badly exposed.
Shares in the Berlin-based group have fallen about 30% over the past year and now trade below €17, valuing the company at roughly €5 billion. At the peak of the pandemic-era tech boom in 2021, the stock traded above €130. That’s not a correction, that’s a crater.
Aspex wants management to accelerate the strategic review announced in December and consider selling businesses where it isn’t the strongest owner or operator, pointing specifically to operations across Asia, the Middle East and Latin America.
CEO Niklas Östberg said the company was evaluating strategic options with advisers at JPMorgan and that negotiations were ongoing. Management maintains the current share price doesn’t reflect operational progress, which is exactly what you say when the share price very much reflects operational progress.
The dispute arrives as Delivery Hero faces compounding external pressure. Competition from Uber, DoorDash, Grab and Meituan has intensified in key markets, and the company is also contending with a €329 million fine from the European Commission related to a food delivery cartel investigation.
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The dispute reflects a broader reckoning playing out across the global food delivery industry.
For years the sector pursued growth at almost any cost, racing into new countries, subsidizing orders with discounts and spending heavily on logistics networks in the hope that scale would eventually produce profits. Investors tolerated those losses during the era of ultra-low interest rates and pandemic-driven demand for home delivery, because the story was good enough that nobody needed the numbers to work just yet.
