An online food delivery (OFD) platform is a website or mobile app that allows users to place food orders, make payments, and track delivery orders in real time. The earliest and most popular model in the industry is the aggregator model, in which the platform hosts menus from multiple restaurants for users to order from. Newer players in the industry have focused on niche segments such as prepared meals and meal kits. Already a growing segment, online food delivery gained immense traction recently due to restaurant closures and social distancing practices to mitigate the spread of the Covid-19 pandemic.
The aggregator (general) segment is highly populated compared to the other niche segments, mostly due to its large potential market size. The segment is the popular pick for incumbents, which are mostly established tech players with an existing e-commerce presence. More established/mature disruptors are also largely present in the aggregator (general) segment, as well as in meal kit delivery.
The larger disruptors in the general aggregator segment - including DoorDash, Deliveroo, and Delivery Hero – are in growth stage, and have regularly raised capital from the equity and equity-linked issuance markets over the last two years. The general aggregator segment also has some newer startups in the pre-seed/seed stage using alternative business models (e.g., commission-free) or operating in niche sectors (e.g. high-end restaurants) to try to compete with larger incumbents and disruptors.
The majority of startups in the seed or pre-seed stages tend to be clustered in the meal kit delivery and prepared meal delivery segments, with these two segments also seeing more early stage start-ups.