Deliveroo has poached a leading technology executive from its own investor, Amazon, as its shares rose closer to their float price.
The food delivery company, which went public earlier this year and endured a first day rout as shares fell by a quarter, has hired Devesh Mishra as its chief product and technology officer.
Mr Mishra spent 16 years at Amazon where he was vice-president of global supply chains, in charge of operations spanning 185 markets. He is due to relocate from Seattle to London and will sit on the company’s executive team and report to the founder, Will Shu.
Mr Shu said: “Devesh is a world class tech talent and we are delighted that he is joining the team.”
Shares in Deliveroo surged as much as 12pc on Tuesday, following a 5pc boost on Monday as it emerged that German food delivery company Delivery Hero had taken a 5pc stake in the company. It is now worth £6.6bn – still more than a £1bn below its float value.
Berlin-based Delivery Hero said it had bought shares in Deliveroo after the stock tanked following the float. Niklas Oestberg, its chief executive, said he believed Deliveroo’s shares were “undervalued” and had been “oversold" at the listing.
The stock deal sparked speculation that Deliveroo’s low share price could leave it open to being snapped up by a bigger rival.
However, a dual class of shares owned by its founder, Mr Shu, gives him 57.5pc voting control despite holding just a 6.4pc economic stake and the right to refuse any takeover approach.
Food delivery companies have been boosted by the pandemic as takeaway orders surge and restaurants ramp up their options for eating out. With markets unlocking and footfall returning to restaurants, analysts are watching to see if pandemic habits in takeaway delivery will stick.
After a period of full throttle growth, investors in the food delivery space believe further consolidation of the fiercely competitive sector could be on the cards.
Earlier this year FTSE 100 firm Just Eat Takeaway completed a $7.3bn (£5.3bn) takeover of Grubhub, and Uber has bought US rival Postmates.
Last week, it was reported that $60bn US food delivery company Doordash was considering taking a stake in German food delivery player Grubhub.
Delivery Hero is backed by Prosus, a spin-off of South Africa’s Naspers, which has expressed an interest in snapping up more delivery companies. The German company said on Tuesday it is planning further expansion in its home market and is targeting Berlin.
Deliveroo is due to report its half year results on Wednesday.