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Interview with Niklas Östberg – the Co-founder and CEO of Europe’s food ordering unicorn Delivery Hero!

This week we had the opportunity to interview Niklas Östberg – the Co-founder and CEO of Delivery Hero. Niklas and his team grew the company to an international food delivery giant, one of Europe’s few unicorns (valued at over $1 billion), and eventually to a successful IPO in 2017.

Founded in 2011 and headquartered in Berlin, Delivery Hero today counts about 17,000 employees and is operating in 40+ markets around the globe. With 1 million orders received per day (Q1, 2018), Delivery Hero is the global leader in the food delivery space. But enough of the introduction – enjoy the interview!

Niklas, what were the main stumbling blocks for Delivery Hero during the first 3-5 years and how did you overcome them?

I probably wouldn’t call it stumbling blocks, rather challenges along the way. When it comes to the online food ordering and delivery industry, building scale is crucial. You have to have a certain size in order to be in a position to continually invest into improving the customer experience. This is the only way to build a sustainable business and eventually becoming a leading player in the space, globally. This is why we really had to focus on scale in the first years.

If you could start Delivery Hero again, what would you do differently from today’s perspective?

If I could start over again, I would start to focus on building great teams and actively developing company culture even earlier. Of course we always had great people throughout the company’s development – we wouldn’t be where we are today without that. But when the company grows as fast as it did (and still does) there are always too many things to focus on as a CEO. So sometimes in the earlier stages, this topic didn’t get quite as much conscious attention as it deserves.

What is Delivery Hero’s unique value proposition that sets it apart from its competitors? In which fields are you innovating?

I believe two things really set us apart. One is our very local approach in such an international company as ours. We believe that food is always a very local and cultural thing and therefore focus on giving a lot of autonomy to our local leadership teams. In order to still benefit from our scale we of course support them with excellent technology and other services from our Berlin-based central team but the final decision on many things always lies with the local teams.

Secondly, I believe that we are unique in the variety of food and restaurant partners we offer. We were the first food ordering company to combine the own-delivery business with a pure marketplace which puts us in a great position to provide our customers with access to both types of restaurants – those that deliver their own food and those that rely on our delivery fleet.

In the years before the IPO, Delivery Hero was able to raise more than $1 billion in venture capital. Why did you need such a large amount of capital, and do you have any fundraising advice you could share with our readers?

We had to invest heavily in building a strong product, in building strong brands all around the world. Brands that customers love and make them return to order again and again. Therefore, we also had to invest in a very good coverage of restaurants, advanced POS technology, dedicated customer service. Of course, we also invested heavily in marketing in order to gain new customers more quickly – as mentioned earlier, building scale fast is very important in our industry.

On your second question, essentially you have to bring across your story in a way that investors share your view on the market opportunity and have faith in the management team and their capability to build the business and execute their vision successfully.

With 17,000 employees in 40+ countries, how do you support corporate culture and how do you make sure employees stay happy and motivated?

Further increasing our employee satisfaction is actually one of our core objectives. As mentioned above, we believe very much in giving our teams around the world a lot of autonomy. For many of our employees this ability to really have an impact on the business and take ownership is a big motivating factor.

This autonomy of course also means that the office culture in Latin America is different from one in Asia or Berlin. What binds us together is a vision to create a great takeaway experience for our customers and the ability to work together with some of the best people in their respective fields on solving the challenges that poses. We then focus on hiring great people with a strong cultural fit who can thrive in that environment of autonomy and ownership.

Beyond that we also invest into other areas, such as creating enjoyable work environments around the world, creating opportunities for our employees to grow and develop and providing other benefits. But besides the factor of autonomy and getting the right people on board who thrive in our environment this is only a secondary factor.

How did the IPO work out for you and how are you investing the additional capital?

The IPO was really successful and the stock price gained significantly since then.

However, the focus of our investment targets changes from time to time. Besides M&A activities I would consider technology, additional sales staff for restaurant coverage, marketing and delivery capabilities as typical investment areas for us.

What are the next steps and future plans for Delivery Hero?

It’s all about creating an amazing takeaway experience worldwide, i.e day by day we focus on taking the customer experience to the next level. Great choice, great food, fast delivery, a friendly delivery person, personal recommendations that allow you to discover exciting dishes – all this adds up to an amazing takeaway experience. If we do that successfully, then we will continue to grow our business for many years to come – the opportunity in the online food delivery space is still incredibly large.

Could you recommend our readers one or two books that helped you during your entrepreneurial endeavours?

I really liked the book “The hard thing about hard things” as it shows the many challenges and struggles that come with running such a fast growing company. I also firmly believe that there is no silver bullet to being successful but instead one needs to focus on the thousands of small details every day.

Editor’s Note: In order to hear about other interesting entrepreneurial stories, tech events and funding opportunities, please make sure to also subscribe to our weekly newsletter.

Thomas Ohr
Thomas Ohr
Thomas Ohr is the "Editor in Chief" of EU-Startups.com and started the blog in October 2010. He is excited about Europe's future, passionate about new business ideas and lives in Barcelona (Spain).

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