Amazon partners with Deliveroo to offer free delivery to millions of Amazon Prime customers in the U.K. and Ireland

Six months after the U.K. food delivery startup Deliveroo went public, Amazon announced yesterday its first major tie-up with the company since it invested in the company two years ago. As part of the partnership, Amazon said it will offer its Prime customers free delivery on takeout orders over a certain amount for a year.

This means that millions of Amazon Prime members in the U.K. and Ireland will get access to the lower tier of the Deliveroo Plus service, meaning they’ll be eligible for free deliveries when their orders exceed £25 ($34) in value. Amazon currently has over 200 million Prime subscribers worldwide and an undisclosed amount in the U.K. and Ireland.

Lisa Leung, director of Prime and marketing at Amazon U.K., said in a statement: “We’re always looking for ways to offer even more value to Prime members giving them the best of shopping and entertainment.”

She added: “That is why we are excited for this offer with Deliveroo — so millions of Prime members in the UK and Ireland can get the convenience of great meals delivered fast.”

The announcement comes two years after regulators at the Competition and Markets Authority (CMA) raised ‘serious competition concerns.’  The deal “raises serious competition concerns” and “may require an in-depth investigation,” CMA said at the time.

Disappointing IPO

As you may recall, Deliveroo had a disastrous IPO after its stocks were hammered and shares plunged 31% in London IPO debut. The company priced its shares at £3.90 ($5.36) but they were down to £2.73 shortly after trading commenced.

The unicorn startup quickly lost more than £2 billion ($2.8 billion) off its market cap as shares plunged. It’s a stark contrast to the debut of DoorDash, which IPO’d in the US back in December. Its shares soared more than 86% at the open. Deliveroo IPO was hit by concerns over Deliveroo’s treatment of its drivers, the company’s governance, and valuation.

The London, England-based Deliveroo was founded in 2013 by Will Shu and Greg Orlowski. The startup makes money by charging restaurants a commission fee, as well as by charging customers a fee per order. It currently operates in two hundred cities.

Deliveroo operates in over 500 towns and cities across 14 markets, including Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, Taiwan, United Arab Emirates, Kuwait and the United Kingdom. The Proskauer team was led by London private equity partner Richard Bull, with associates Andrew Houghton and Darpit Mehta supporting him throughout the transaction.