Niklas Östberg on Delivery Hero’s Growth, Acquisitions and the Cost of Moving Too Fast

Delivery Hero founder and CEO Niklas Östberg says fast growth is valuable only when the economics behind it last. In this March 2025 conversation with Harry Stebbings, he reflects on pandemic-era financing, a costly Gorillas investment, acquisitions, customer cohorts and competition. His assessments and projections reflect his role leading Delivery Hero.

Östberg traces some of his resilience to cross-country skiing in Sweden, training for hours in the dark. Purpose, a supportive team and focusing on things he can affect also help him persist. Success can build confidence, he says, but it can also make people lose perspective.

He remembers making and quickly losing money in the stock market when he was young. During the pandemic, he thinks the company also overestimated its own abilities as business surged. Good times and bad both offer reasons to stay grounded.

With hindsight, Östberg would have cut costs and reduced risk earlier as the pandemic ended and interest rates and capital markets changed. He also would have raised equity rather than debt when the company had a much higher valuation.

He says management believed a $100 billion company was within reach and did not want to dilute shareholders at roughly $30 billion. As the share price fell, each successive drop made an equity raise feel too late. His lesson is to be cautious about debt and not let fear of dilution turn into greed.

He says the team initially believed the stock decline was temporary and continued to trust its operating metrics. Delivery Hero had already made cuts and closed operations in Germany and Japan before markets deteriorated further; sustaining morale became harder as the share price remained depressed for years.

Östberg judges the company overvalued at its earlier peak on a short-term comparison and believes it was undervalued at the time of the interview. He acknowledges that the answer depends on the valuation approach. This is the CEO’s opinion, not an independently established price target.

Great leaders, he argues, must follow their convictions even when those views are unpopular. Judgment still matters: a contrarian decision earns trust when it succeeds, while a leader who acts against their own beliefs can undermine consistency.

He recalls investing in delivery logistics around 2015 when many doubted the strategy. An initial initiative lost €6 million and was shut down, but the company rebuilt and invested further because he believed delivery could improve the customer experience if the economics could be solved.

Selling Delivery Hero’s German home market was another controversial decision. Östberg says he saw a strong competitor and limited scope for later consolidation, and believed the proceeds could support larger opportunities elsewhere. He also felt headquarters’ focus on Germany had distracted the company from international execution.

He has changed his mind about food delivery being winner-take-all. He points to markets with multiple profitable operators and argues that a company needs enough scale and good service, but does not necessarily have to be the only large player. His examples and profitability assessments are his own.

Asked about Deliveroo, he argues its valuation at the time was too low and that competition constraints could prevent consolidation in the UK. Whether another owner could improve the business or pay a premium is a separate question; his assessment is not a transaction announcement.

Scale can support loyalty, he says, but poor service can quickly open the door to a challenger. Delivery Hero entered some countries behind incumbents and became a leader. He now thinks its own execution accounts for roughly 80% of success and competition 20%, a heuristic rather than a measured attribution.

Over time he has come to value simplicity: organizations often try to do more than they can handle. Focus on a few priorities, he says, reduces complexity and preserves speed.

He agrees that strong CEOs allocate capital well but considers culture, direction, speed and good data even more important. Many daily allocation choices become clearer with reliable information; the hardest strategic decisions require judgment when evidence is incomplete.

Quick commerce was one of his contrarian bets. Östberg expects groceries and other non-restaurant categories to account for more than half of Delivery Hero’s business in the long term. That is a company leader’s forecast, not a reported current revenue mix.

Delivery Hero also invested close to $200 million in Gorillas to learn and access markets it could not afford to build everywhere itself. Östberg says the company recovered only a small portion and lost most of the investment as capital became harder to raise and the business burned cash.

His lesson is to examine cohort behavior and customer acquisition economics closely. Gorillas repeatedly grew faster than he expected, leading him to doubt his own model, but he now believes discounts and promotions can temporarily obscure weak underlying economics.

Stebbings asks how long an investor should stick to a belief when evidence seems to contradict it. Östberg concedes that adapting matters and momentum can reward those who follow it, but urges caution about being swept up in the surrounding excitement.

At the time of the Gorillas bet, $200 million was a small fraction of Delivery Hero’s much higher market capitalization. He says a subsequent fall in valuation changes the practical significance of that loss, particularly if cash is limited. He learned to assess the underlying commitment rather than relying on the current stock price.

He still prizes execution speed because many operating decisions can be reversed, tested and improved. Compounding small gains in product development over years can produce a substantial difference. Large investments, by contrast, are harder to reverse and merit more deliberation.

To maintain speed at scale, he assigns ownership and measurable goals at a country or team level. Individuals should be able to see their contribution and have enough autonomy to influence it. A culture focused on output, rather than internal activity alone, supports accountability.

There is no single correct leadership style, he says: successful leaders differ in how they work. His advice is to be authentic, use personal strengths and hire people who complement weaknesses.

In Delivery Hero’s early rapid growth, he felt too young and inexperienced to run such a large organization and sometimes pretended to know more than he did. Acknowledging his strengths and weaknesses, he says, improved trust and let others complement him.

Delivery Hero has made more than 35 acquisitions, but Östberg stresses that most were small. The approach was to partner with local entrepreneurs who knew their markets and add the company’s experience in scaling, measurement and efficiency.

He cites early acquisitions that had tens of thousands of monthly orders and later became far larger, including Talabat. These are management’s examples of growth, not independently calculated investment returns. The company often acquired both a team and a head start.

Buying is not automatically easier than building, he argues: the difficult work is making the acquired company successful. Earlier, Delivery Hero bought and built rapidly to achieve scale; he says it would generally prefer to build at the time of the interview unless an acquisition adds a strong team and makes the wider company better.

On Glovo, Östberg says Delivery Hero evaluated repeat rates, customer acquisition, costs and expected margins. Stebbings challenges whether later customer cohorts will resemble earlier ones. Östberg replies that experience across many markets provides useful comparisons, although his future projections remain uncertain.

He says cohorts can weaken when a service misses important changes or customers were acquired through discounts. He gives delayed logistics investment and multivertical offerings in Colombia as examples of execution failures. Durable retention, in his view, depends on customer experience and sustainable economics.

Östberg projects Glovo’s order margins could eventually reach 10–13% and says its cohorts made him confident about long-term profitability. That figure is his forecast of a specific margin, not current group net profit. He recalls Glovo losing roughly €330 million when acquired, which added near-term pressure.

Asked whether a roughly $2 billion price was right, he notes that the purchase used Delivery Hero stock and estimates dilution in the mid-single digits. He calls the acquisition attractive because he expects Glovo to outgrow the wider business; the expected growth and long-term return are not guaranteed.

Strong cohorts are not simply large baskets, he says. A service needs to make frequent small orders convenient while eventually earning sustainable economics. Delivery Hero took years to break even per order in logistics and quick commerce, which he attributes to the time needed to improve efficiency.

When a competitor spends heavily on discounts, Östberg argues that copying it can damage profitability. His strategy is to retain customers through service and sustainable order economics. He believes some discount-seeking customers leave when promotions end, although individual market outcomes can differ.

He thinks the pandemic-era funding bubble drove temporary demand rather than a lasting step change in cohorts. In his account, orders briefly rose above their trend and later returned to it, leaving the company with unnecessary spending.

Östberg tries to retain acquired founders by offering trust and persuading them with shared data instead of simply overruling them. He says founders such as Glovo’s Oscar can also contribute to decisions across the broader group rather than only their original business.

That approach can take longer. He recalls hesitation over moving local operations onto a common technology platform, because founders feared losing control. In Turkey, he says, a delayed transition led to a nine-month migration and a large business impact, followed by roughly two years of recovery.

Asked whether DoorDash and Uber Eats are the main threats, he returns to his 80/20 heuristic: execution matters more than competitors’ balance sheets. He argues that a rival cannot sustainably make poor investments merely because it has cash; this is his view of competition, not a guarantee.

He points to heavily discounted growth at competitors and his own Thailand operation. Delivery Hero’s Thailand orders grew from a few thousand per day to 400,000 in under a year, he says, but the strategy was unsustainable; by the interview, orders were at or below about a quarter of that peak.

In Thailand, he says, low prices drove orders while customer experience received too little attention. Once the company tried to make the economics sustainable, many orders disappeared. Rapid volume growth alone therefore did not create the business value it seemed to promise.

Entering a market requires product-market fit and returns that justify the additional regulatory and operational complexity. He looks for customer lifetime value and acquisition cost to work within roughly a year, then may invest for several more years to scale.

A market that breaks even immediately is not necessarily the best one, he argues: it may simply be growing slowly. He contrasts this with his early bootstrapped online pizza business, which was close to break-even from the start but grew gradually.

Stebbings asks whether emerging-market revenue receives a lower valuation multiple and is harder to turn into liquidity. Östberg distinguishes the price investors assign today from the long-term value and cash flow an operator can build. That distinction does not eliminate the risks Stebbings raises.

On acquisition returns, he says early small deals such as Talabat produced very large multiples in his estimation, whereas a larger deal such as Glovo may generate substantial absolute value with a lower multiple. These are his estimates, not audited realized returns.

Östberg remains optimistic about Europe’s education, infrastructure, talent and institutions, while acknowledging weaknesses. He wants faster access to international talent and less cumulative regulatory bureaucracy.

He argues that overlapping requirements can burden European companies, especially smaller ones, and alleges uneven enforcement against foreign competitors. He also sees the Digital Markets Act as potentially useful if enforced. These are his policy views and allegations, not findings established by the interview.

Regarding regulatory pressure on Glovo and its founder, he says group leaders need to understand the details, support one another and share responsibility for collective decisions. He does not assign blame for challenges outside an individual leader’s control.

In quick-fire questions, Östberg predicts ordinary companies deploying AI may benefit more than the largest companies building it. He says his concern is making Delivery Hero more efficient, not creating an AI story for investors.

Asked for one stock to hold for ten years, he mentions Amazon but notes that an already high valuation can limit multiple expansion. This is a personal opinion at the time, not investment advice.

He would continue investing in quick commerce and adjacent categories where he sees supporting data. His expectation that these areas could exceed half of the business over time remains a forecast, not an achieved result.

He thinks drones could eventually handle a share of deliveries but may need a decade to reach meaningful scale; regulation, noise and landing space are obstacles. He expects delivery robots to scale faster in some locations, although they travel more slowly. These are estimates and predictions.

Money itself does not make him happy, he says; purpose, teamwork and shared experiences do. On marriage he emphasizes conversation, honesty, forgiveness and trying to understand another person’s perspective.

Looking ahead, Östberg is excited by AI and drug discovery, especially applications where he can help drive practical improvements. He expects AI to make businesses substantially more efficient, a future outcome rather than a demonstrated result for every company.