San Francisco-based food delivery company DoorDash announced that it had reached a deal to acquire Finnish food delivery rival Wolt through an all-stock deal worth $8.1 billion. The deal is expected to be the largest acquisition in Europe's rapidly growing food delivery market.
Wolt, based in Helsinki, is a relatively new and smaller food delivery company founded in 2014. The company currently has around 4,000 employees and operates across 23 European countries.
Wolt has raised over $850 million since it was founded. Iconiq Growth led a $530 million fundraising round in January, with participation from Tiger Global, DST, KKR, Prosus, EQT Growth, and Coatue. Wolt is DoorDash's sixth acquisition, and its second in 2021, following the acquisition of Chowbotics earlier this year.
Tony Xu, DoorDash's co-founder and CEO, said the acquisition would allow the company to access 22 new countries and a pool of more than 700 million customers. Doordash already operates in Germany, where it has been vying for market share in the rapidly growing food and grocery delivery sector.
DoorDash's share price surged by more than 20% in after-hours trading Tuesday following news of the acquisition. The company plans to complete the transaction by the first half of 2022.
Under the deal, Wolt's founder and CEO, Miki Kuusi, will become the head of DoorDash International. The new division will oversee the company's operations outside the U.S.
Kuusi said that just months ago, he never thought he would be working for DoorDash. However, he has now realized that together the two companies can do so much more together in Europe and beyond.
Apart from spending on the acquisition, DoorDash also announced plans to invest up to $400 million in the grocery app Flink. The investment will be part of a $600 million Series B fundraising round for the German company, which will give it a pre-money valuation of roughly $2.1 billion.
DoorDash became one of the world's largest food delivery companies during the pandemic. During the global crisis, the company set record orders and earnings as people shifted to having their food and groceries delivered amid months of lockdowns and movement restrictions.
