(Bloomberg) -- Deliveroo's battle with food delivery rivals is intensifying after the U.K.-based startup posted strong growth, but also an increase in losses.
Global sales from its food-delivery business have increased 72% over the past year, reaching 476 million pounds ($583 million) for the year ended Dec. 31.
Growth was driven by its international markets and the launch of a marketplace platform for restaurants with existing fleets of drivers to sell meals via the London-based startup's app, it said in a statement Wednesday.
Although sales grew, profitability is a way off. Deliveroo posted a pre-tax loss of 232 million pounds for the period, compared to 199 million pounds a year earlier.
Deliveroo Chief Executive Officer Will Shu said he was optimistic about the company's outlook, and said it “continued to invest heavily in expansion, technology and new products.”
In May, Deliveroo said it had secured $575 million in funding led by Amazon.com Inc. and other investors, and would continue to expand in markets including the U.K., France, Italy, Spain and Dubai. But in August, it announced an abrupt retreat from Germany after more than four years, as an increasingly cut-throat competitive landscape piled pressure on the industry.
The food delivery industry has been roiled by mergers of late. Just Eat Plc and Takeaway.com NV agreed in July to a 5 billion-pound combination, less than six months after Takeaway.com spent about $1 billion for the German operations of rival Delivery Hero SE. Spanish food delivery startup Glovo has also drawn preliminary interest from Uber and Deliveroo in recent months.
Uber Eats and Deliveroo are currently battling for virtual restaurants, where eateries lease kitchen space to prepare food for couriers. With no dining rooms or wait staff, these outfits pop up where food delivery companies expect demand, and sell their meals through Uber Eats or Deliveroo's app.
Deliveroo has raised $1.53 billion, and was valued at $2 billion in a funding round in 2017. Over the next four years, the food-delivery business is estimated to increase 12% a year, to $76 billion in 2022, according to investment firm Cowen Inc.
To contact the reporter on this story: Nate Lanxon in London at nlanxon@bloomberg.net
To contact the editor responsible for this story: Giles Turner at gturner35@bloomberg.net
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