Deliveroo in “position of weakness” as investors fear for its future

Deliveroo’s future is becoming increasingly uncertain thanks to hundreds of millions in cash from Amazon being held by authorities and increasing pressure form rivals.

Investors in the delivery giant have raised fears over the company’s immediate future, with one telling the Financial Times that: “How they are keeping the lights on is an open question”.

Recent acquisitions in the sector have piled yet more pressure on the loss-making Deliveroo, which is already battling funding concerns amid an investigation by the Competition and Markets Authority (CMA).

Earlier this month its key rival Just Eat acquired Takeaway.com, creating a new dominant entity in terms of revenues in Europe.

READ MORE: Amazon offers Deliveroo “significant” loan as CMA probe continues

Here in the UK Uber Eats is also eating away at its market share, particularly outside of the capital, while Just Eat secured an exclusive delivery agreement with the wildly popular high street baker Greggs.

This comes as Amazons purchase of a minority stake in Deliveroo is forcibly put on hold by the CMA, preventing hundreds of millions in cash from being accessed.

The CMA has extended it investigation into the tie-up amid competition concerns, meaning the cash may not be released for months if at all.

Investors now predict that the company may need even more funds through private backing or an IPO to stay afloat over the next year.

“Deliveroo are in a position of weakness,” an executive at a rival delivery company told the Financial Times.  

“Raising (capital) now would be very difficult.”

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