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Amazon Invests Competitor UberEats Deliveroo: Why It Matters



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Amazon just bought a big share in the huge competition for food supply giants like UberEats and Just Eat, and experts have some theories about the rationale behind the deal and what it means for the e-commerce giant.

"The Amazon curse is hitting again," said Russ Mold, an investment manager at brokerage firm AJ Bell. "The Internet giant is now so dominant that just mentioning its entry into a new industry can leave the incumbent companies and their shareholders shaking in fear."

Mold says the Titan technology could be looking to compete with food delivery services by buying into a regular player like Deliveroo. Amazon has previously tried to enter space with its own food delivery service in the UK named Amazon Restaurants, which closed late last year in a competition from Just Eat and UberEats.

The impact on the stock price of GE Ast following the announcement of the transport round in the Amazon in Delivero was punished. The stock was the last 8% lower trading on the London market, as shareholders digest the news. Uber shares, however, fell by 2% at the beginning of trading.

Deliveroo raised $ 575 million in total funding, but did not find out how much it came from Amazon. The London-based company said it would use the funds to grow its engineering team in the UK capital and expand its operations to offer its services to new customers.

"Given the strength of its financial fire, it's no wonder that Amazon effectively blocks its tanks on East Lawn," says Mold.

Amazon, with a market capitalization of nearly $ 940 billion, is one of the most expensive companies in the world. The company posted revenue of $ 59.7 billion in the first quarter of 2019.

& # 39; Bulb & # 39; At Uber

The move is interpreted by some as a clear challenge to Ober, one of the most dominant players in delivering food online.

"This is a clear shot across the spectrum at Uber," said Dan Ives, research director of Wedbush's stock equity firm as CEO of Bezos and his company "understand that they need to play aggressively protecting and protecting the food delivery front."

"This is a $ 50 billion market opportunity over the next decade, and Amazon knows it's time to build its presence on this front with the excess of failures on Over It's," Ives added.

And although there is a large amount of financing, the investment is unlikely to be a concern for Amazon's financial situation, said Lyle Halif, senior analyst at Harrreaves Lansdown.

"We do not know how much Amazon contributed $ 575 million, but considering that it has $ 23 billion in cash on its balance sheet, it will not break the Bezos piglet," he says.

"The investment represents another of Amazon's many arms, and it is not particularly worried when someone is burned, if others can take a vice grip on the markets where they operate."

CNBC's Chloe Taylor, Matt Clintz and Spriha Srivastava Contribute to this report.

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