Deliveroo riderImage copyright Getty Images

Online giant Amazon has announced a big investment in food courier Deliveroo.

The exact figure was not given, but Amazon is the biggest investor in Deliveroo’s latest round of fund raising, which in total raised $575m (£450m).

Deliveroo said it would use the money for international expansion, improving its service and to grow its delivery-only kitchens business.

Several existing US investors also contributed to the fund raising.

The amount of capital invested in Deliveroo since it was founded in 2013 now totals more than $1.5bn, and the company is one of Europe’s fastest growing technology companies.

Deliveroo founder and chief executive Will Shu said he was looking forward to working with “such a customer-obsessed organisation” like Amazon.

Amazon said it was attracted by Deliveroo’s “innovative technology service”.

‘Predictive growth’

The backing from Amazon gives Deliveroo a boost against its biggest rival Uber Eats, part of taxi-hailing app Uber which recently floated its shares on the New York Stock Exchange to raise money.

The online retailer briefly had its own UK food delivery venture, Amazon Restaurants UK, which it started in 2016 but closed just two years later.

“They [Amazon] weren’t able to compete within the market so they’ve gone for the buying option instead. They’ve got the money behind them to do that,” Louise Dudley, fund manager at investment firm Hermes, told the BBC’s Today programme.

“It [Deliveroo] is not just a food delivery company it’s very much a tech company. They have this tech platform that is seen is very attractive. They are able to expand into new areas and think about how people’s tastes are evolving and be able to predict what stores will be successful. That predictive growth is very attractive to Amazon”.

Amazon had previously been reported to have made approaches to buy Deliveroo outright. Uber also reportedly had talks with Deliveroo over buying it.

Deliveroo now operates in more than 100 towns and cities across the UK, and delivers food from a wide variety of restaurants.

As well as the UK, Deliveroo operates in Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, the United Arab Emirates and Taiwan.

Global sales at the firm more than doubled in 2017, jumping to £277m, but its losses continued to increase, doubling to nearly £185m as it invested in global expansion.

The firm uses more than 60,000 couriers – mostly using bikes or moped – to deliver food from restaurants to customers.

Deliveroo does not employ its riders directly, but pays them per delivery.

Last year, a group of 50 UK Deliveroo couriers won a six-figure payout after claiming they had been unlawfully denied holiday and minimum wages.

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