Deliveroo has become the latest food delivery tech firm to retreat from its international markets after the London-listed business said it would be shutting down its operations in Hong Kong.
In a stock exchange update, Deliveroo said its Hong Kong platform would be live until 7 April, after which liquidators will manage closure of the business and the remainder of its assets in the most efficient way possible. Some of the assets would be sold to rival Foodpanda.
Hong Kong represented 5% of Group GTV and had a 5 percentage point negative impact on International GTV growth and remains adjusted EBITDA negative, the firm said.
“There are several dynamics specific to the Hong Kong market which led the board to consider strategic options and, given the group’s commitment to disciplined capital allocation, determine that it would not serve shareholders’ best interests to continue to operate in Hong Kong.”
Deliveroo shares rose as much as 2.5% to 128p in early London trade on the back of the announcement.
The moves comes despite assurances from CEO Will Shu as recently as August that the firm had no plans to withdraw from any of its markets in the coming months, adding: “We’re happy with the markets we’re in.”
The firm’s closest rival in Europe, Just Eat, withdrew from France and New Zealand last year. It also sold its US business GrubHub in a $650m deal.
In previous years, Deliveroo has exited Germany, Taiwan, Spain, the Netherlands and Australia. In Europe, the firm continues to operate in the UK, Ireland, France, Belgium and Italy.
Deliveroo first launched operations in Hong Kong after completing a $100m Series D funding round in 2015.
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