What's going on?

According to a Bloomberg report, ride-hailing behemoth Uber is in talks to buy online food delivery company Deliveroo � leading shares of competitor Just Eat to fall by 5% on Friday.

What does this mean?

Deliveroo, which helps restaurants get food into the homes of customers in 200+ cities who don�t want to eat out, had hinted at an initial public offering (IPO) � but appears to have been considering a sale, too (known as a �dual track�). If a sale or investment�s agreed, it�s likely to push Deliveroo above last year�s valuation of $2 billion � when it raised almost $100 million from venture capital investors.


Uber�s planning a 2019 IPO and has been considering buying competitors to lower costs (it won�t have to spend on competing against them) and make a profit. Acquiring Deliveroo would complement its competing Uber Eats business, which is in 300 cities and on track to generate tasty revenues of $6 billion this year.

Why should I care?

The bigger picture: A deal could suit Deliveroo right down to the ground.

Deliveroo may opt for a sale � being a public company�s not without its challenges, especially when the company�s yet to turn a profit (just ask Tesla’s CEO). While stocks of companies with no profit have risen more than ones with a bottom line this year, this September has seen investors switching allegiances to more predictable and profitable stocks in sectors like utilities and consumer staples.

For markets: Investors go figure.

Just Eat�s stock fell along with Dutch peer Takeaway.com. Investors are likely worried that a bigger competitor could mean Just Eat will have to spend more on marketing in order to attract new customers and keep existing ones, which could dent profits. The writing isn�t necessarily on the wall, though: fewer competitors could also mean marketing costs fall, since there�s one less company to shout over in order to be heard by hungry customers.