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Uber's attempt to buy Deliveroo is stalled because both parties are "distant from hope" for an evaluation of the food delivery service, according to informed people of the discussions.
The application, based on advertising, wants to buy or invest in Deliveroo, one of the biggest technological successes of the United Kingdom, but a recent offer of the company was worth less than 2 billion dollars, while Deliveroo estimated its worth $ 4 billion, according to informed people on the talks.
It was reported in September that Uber had held preliminary negotiations with a view to acquiring or investing in the London-based start-up, while it was developing its Uber Eats business.
The two sides are still in talks, but a person familiar with the discussions said that there was such a "significant gap" between them that the interest has cooled.
Another person familiar with the talks said Uber's offer had given Deliveroo a price lower than the $ 2 billion valuation at a fundraiser last year. A person close to Deliveroo said that the start-up is currently trying to raise $ 400 million for a valuation of $ 4 billion. Its fundraising effort was reported for the first time this weekend by Sky News.
Deliveroo's main investors, including Fidelity and T. Rowe Price, are looking for an investment or partnership rather than full sale, according to relatives of both tech companies.
Deliveroo is one of Europe's best-funded start-ups and has invested millions of dollars to differentiate itself from rivals, including building industrial kitchens for restaurants, which will serve as the hub for orders.
Uber Eats launched more than a year ago similar "virtual kitchens", which encourage restaurants to use more space to prepare dishes from other menus.
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Deliveroo does not operate in the United States and would offer Uber a chance to expand its business in Europe, which has proven to be a bright spot for food delivery. The company has hinted that it would be willing to enter into agreements before an IPO scheduled for next year.
Deliveroo's revenues have more than doubled to £ 277m in 2017, according to government deposits, but losses have risen 43% to £ 185m after spending money to recruit 300 engineers, get started in new cities and open kitchens.
Any acquisition of Deliveroo by Uber may also be complicated by competition concerns. In the United Kingdom, the competition watchdog had investigated the purchase of Hungryhouse, the British arm of Delivery Hero, for £ 200 million.
This agreement was signed in 2017, with the Competition and Markets Authority having noted that the strong growth of Deliveroo had prevented any significant reduction in competition. Deliveroo has been present in the UK since 2013, while UberEats was launched in 2016.
Deliveroo declined to comment; Uber also declined to comment.
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