After taking out the checkbook, Delivery Hero will be in charge of dealing with the regulatory front that Glovo It is ahead in the Spanish market and in other European markets. And the german giant supports the labor model proposed by the local company, despite demands from unions and regulatory pressure. The CEO of the German multinational has assured analysts that a “great job” is being done to take care of the ‘riders’. “The more flexibility the better”, has pointed out the chief executive of the listed company, which has promised profitability of its food delivery business during the first half of 2022 after completing the acquisition of the Spanish firm.
In the Spanish market, Glovo has proposed a mixed model, in which a minority part of the delivery staff was hired, while the rest remained independent with some changes in the employment relationship. This approach has awakened harsh criticism from unions. The main organizations filed lawsuits with the Labor Inspectorate this summer after the entry into force of the so-called ‘rider law’. However, from who will be the new owner of the startup there is clear support for “flexibility” in this market.
“The company is very close to work; they really care about the ‘riders’. They did a great job and you see that the satisfaction score is really good”Niklas Östberg highlighted. He did so after his counterpart at Glovo, Óscar Pierre, gave the keys to that model and his opinion on the regulation that the European Union is now starting. “The first draft may be too restrictive for the riders and it goes against what they want; but it is in the early days. I think we have probably two years ahead of us and we expect a lot of changes until they become law. in some of our markets “, pointed out the Spanish founder.
Why give up control?
Outside of the regulatory field, Pierre wanted to justify the change of opinion about keeping Glovo independent in the face of the advancement of Delivery Hero. The manager has insisted that perhaps he “has idealized the act of making a public offering and staying independent”. Faced with questions about what has changed in the market so that it would give its arm to twist and accept the offer of the Germans, he insisted that during the last year they have gotten to know and work with their new owners “much better”. “They have a unique model to accommodate founders and continue to give them a lot of autonomy while unlocking many synergies,” he added. “Yes, I feel like it was the right moment,” he said.
Regarding the single model to accommodate the founders, Delivery Hero will maintain the independence of the brand, although logically it will integrate part of the entire technological and cost ‘back room’ to achieve those efficiencies. It also ensures a ‘bonus’ to the team and staff that at the price of the shares at which the agreement was closed was valued at about 700 million of euros. As they have made public today, the management team, led by Pierre and Sacha Michaud, has been given the option of keeping 2.5% of the startup’s titles that they control today and exchanging them for Delivery Hero titles for a period four years after the closing of the sale.
The numbers of the Spanish
In the purely economic field, the German company has revealed that the Spanish startup has 140 million euros in cash -In April it closed a round of 450 million between issuance of new shares and purchases in the secondary market-. This will be in addition to the 250 million euros of financing that they are negotiating. “This will finance the business until it reaches the ‘break-even’ in terms of cash flows,” the company assures its investors. “All this money is not going to be used in 2022, but it is going to be used for that break-even,” Östberg explained.
Glovo’s incorporation into the Delivery Hero perimeter is expected in the second quarter of this year. They must have the green light from the Competition authorities in Spain, Poland, Romania and Portugal. With this sum in the structure, the Germans hope to reach the point of financial equilibrium during the first half of the year to achieve up to 100 million euros of Ebitda (gross operating result) in the last quarter.
Regarding the numbers of the Spanish, its future owner has assured investors that in October they were in a volume of business transacted on his platform of 3,000 million euros. In December it was already 3.8 billion. This represents a growth of 800% compared to the previous year. These are not their income, because from there the company extracts a commission from both the end customer and the owners of the stores or restaurants. Those 3.8 billion include three “small” purchases that have been made but are not yet formally closed.
Source: LA INFORMACIÓN – Lo último by www.lainformacion.com.
*The article has been translated based on the content of LA INFORMACIÓN – Lo último by www.lainformacion.com. If there is any problem regarding the content, copyright, please leave a report below the article. We will try to process as quickly as possible to protect the rights of the author. Thank you very much!
*We just want readers to access information more quickly and easily with other multilingual content, instead of information only available in a certain language.
*We always respect the copyright of the content of the author and always include the original link of the source article.If the author disagrees, just leave the report below the article, the article will be edited or deleted at the request of the author. Thanks very much! Best regards!