Deliveroo to expand own brand restaurants with £5m fund

Deliveroo has established a £5 million fund to help it expand beyond the takeaway market and into own brand restaurants, with plans to invest in new concepts in the UK and “potentially internationally”.

Deliveroo is expanding the number of its own kitchens from 74 to 130

The London-based delivery app said on Friday it had launched a £5m “innovation fund” with the aim of funding new restaurant brands and also collaborations with celebrity chefs that want to expand into new areas or develop menus that can be delivered by its couriers.

The fund will see the number of “dark kitchens”, which are not open to the public and used by the group to prepare meals and arrange deliveries, increase from 74 to 130 by the end of the year. Its first will be a Sicilian-style pizza brand, Nonna’s Square Pizzas, launching in Cambridge this month, according to the Evening Standard.

It also has plans to open kitchens in Madrid, Paris, Sydney and Amsterdam, having already opened sites in Singapore, Dubai and Melbourne.

These kitchens are in addition to the hundreds of high-street restaurants from which meals can be ordered from and delivered by its team of couriers.

The move will see Deliveroo expand their footprint without opening a new site, and reduce its reliance on the casual dining sector, which has suffered from a number of closures this year, caused by rising rents and higher operating costs.

Caleb Merkl, vice president of special projects at Deliveroo and co-founder of the New York based delivery start-up Maple that Deliveroo bought last year, said: “Expanding our delivery-only sites, giving restaurants access to our super kitchens, Deliveroo will bring new, exciting brands to local areas.”

He added: “At a time when there are so many barriers for chefs wanting to turn their dream into reality, Deliveroo will use our expertise to help restaurants to expand and help budding chefs to have their first shot. For consumers this is nothing but good news, with more amazing, restaurant-quality food available more of the time.”

According to reports by the Financial Times, Deliveroo is said to be looking at an initial public offering in the next two years, and this week revealed plans to offer a £10m worth of share options to staff.