Foodhub

UK-based Foodhub is a third-party food delivery service and leading multi-channel POS provider for the hospitality industry, with more than 25,000 restaurant partnerships across the UK, US, Ireland, Australia, New Zealand, Guatemala, and Mexico, as at May 2021. The company announced its US market launch in May 2021, focusing initially on the state of Louisiana as an entry point, as its volume of independent restaurants, population density and city sizes more closely resemble Foodhub’s home market, the UK. Its US entry strategy involves initially partnering with restaurants with their own delivery system, until it forms a partnership with a US company to launch delivery services.  

In contrast to most of its OFD competitors, Foodhub operates under a unique zero-commission model. Instead, restaurants sign on to the platform under a flat monthly subscription fee and are also charged a 3% transaction fee.  The company reportedly encourages restaurant partners to pass on their savings (arising from the zero-commission payment structure) onto their customers. As a result, orders made on its platform are claimed to be 15% cheaper on average compared to its competitor Just Eat Takeaway (as per a third party study conducted in 2019). Consumers are also not charged a service fee on orders. 

For FY2020, the company recorded revenue of GBP 30 million (USD 43 million), a growth of 10x since inception. The company also saw a sharp 70% increase in the number of restaurants on its platform during 2020, going from 12,000 outlets at the start of the year to over 20,000 by February 2021, likely due to the lure of its zero-commission model. This makes it the UK’s third largest delivery platform, in terms of the number of restaurant partners, behind Just Eat Takeaway and Deliveroo. However, its UK market share by customer spend remained broadly static in 2020, while its competitors Uber Eats and Deliveroo registered market share gains over February 2020 - February 2021. Foodhub reported a 40% YoY increase in orders made via its app over April 2020 - April 2021, benefitting from growth in food delivery demand amid the pandemic. 

In March 2021, the company announced plans to raise private equity of GBP 100 million (USD 143 million). Foodhub intends to use the funds for expansion to new markets via acquisition, and development of existing operations.