HelloHungry for acquisitions in the Balkans

By bne IntelliNews April 24, 2015

Clare Nuttall in Bucharest -


Since Bulgarian online food delivery service HelloHungry entered the Romanian market in 2014 through the acquisition of two local companies, it has almost doubled the size of its Romanian business through a combination of investment and the evolution of the e-commerce sector.

HelloHungry announced in November that it had bought two Romanian food order platforms – higher-end Quicky.ro and Oliviera, which caters to the mass market. Business through the two platforms has since grown by 70%, the company’s founder Vladimir Davchev said in an interview with bne IntelliNews. In addition to persuading more restaurants to sign up for online orders, HelloHungry has invested in improving quality of service as well as expanding out of Bucharest into Timisoara. It now plans to launch in other Romanian cities before long. At the same time, both Quickly and Oliviera are being migrated onto the platform that already serves its original Bulgarian brand BGMenu.

However, the rapid growth achieved in both Romania and the company’s home market of Bulgaria is a recent phenomenon.

When Davchev launched BGMenu a decade ago, the concept was far ahead of its time. Davchev was living in Boston and originally planned to launch a restaurant delivery service to take on Diningin, the dominant player on the local market, but instead decided to return to Bulgaria. “We developed a genius platform able to handle thousands of orders a second, ignoring the fact that there was no market at that time,” Davchev admits. “We had to create the market.”

Creating the market involved numerous experiments from setting up a delivery service to distributing a print version of BGMenu, since at that time few Bulgarians were e-commerce users. The business was forced to adapt again with the onset of the global economic crisis in 2008. “We targeted the middle and upper classes, only offering deliveries from good restaurants. In 2008, the middle class started to disappear, so we had to recalibrate the business and open the platform to cheaper and fast food restaurants.”

Seeds to grow

The turning point came at the end of 2013, when BGMenu secured funding from LAUNCHub, a seed fund supporting digital start-ups in Southeast Europe. This was followed six months later by a second round of financing, and the company is close to signing an agreement with a strategic investor for long-term financing. Altogether, HelloHungry has raised just over €1mn in the last 15 months. “In the last year we achieved more than in the previous 10 years. When we launched 10 years ago, the market was not there,” says Davchev. “A year ago we pressed the reset button. We came back with 10 years of experience and more money in a more mature market.”

Growth in the last year has been approximately 50% organic and 50% through acquisitions, and the company plans to continue with this balance.

Probably the biggest step was the expansion into Romania, which according to Davchev is a less developed but larger market than Bulgaria. Despite the high level of emigration from Romania in recent years, its population currently stands at over 19mn, compared with just 7.3mn in Bulgaria.

Market research shows that up to 100,000 online food orders are placed per day in Romania, with Bucharest accounting for 20-25% of that. In Bulgaria, total orders are 20-30% lower, although the country has more e-commerce users per capita.

However, the markets in both countries are growing, and the sector proved to be remarkably resilient to the recent crisis. “Food deliveries kept on growing through the crisis,” says Davchev, speculating that, “unlike when you go to a restaurant, you know in advance what you will get and how much you will pay for it. You have that predictability, but at the same time you are treating yourself.”

In Bucharest unemployment is low, and household incomes are increasing. With both parents working in many families, households have less time but more disposable income. “People want a better quality of life, and one way to achieve that is not to cook,” says Davchev. “They are also becoming more health aware, so while they used to order pizza now they are looking for deliveries of food that is higher quality – which means higher priced.”

Tax cut

The Romanian government’s April 7 announcement of a cut in the VAT rate on food from 24% to just 9% from June is also expected to benefit the sector. Davchev forecasts that in addition to boosting profits for restaurants, this will also result in restauranteurs using the increased funds at their disposal to invest into better quality inputs, staff training and improving order management and food service. The tax cut does not apply to food delivery services, but according to Davchev “anything that benefits the restaurants will benefit us”.

Following the expansion into Romania, HelloHungry is now looking for further opportunities across Southeast Europe, which lags behind western markets. Highly developed in the US, the food delivery market then gradually declines as you move from west to east, until you reach countries like Greece and Turkey where the sector is well established, Davchev explains. 

HelloHungry was considering a move into Serbia last year, but opted instead to enter the Romanian market, while the dominant Serbian player Donesi was snapped up by international food delivery company foodpanda. Instead, HelloHungry is now looking for acquisition targets in other Balkan countries, though it is not pursuing expansion at any cost. As Davchev says, “our main goal is to be the dominant player in the market, which is more important than going into as many countries as possible.” 

Related Articles

Macedonia kept on hold as Balkans edges towards EU goal

Clare Nuttall in Bucharest -   Macedonia’s EU accession progress remains stalled amid the country’s worst political crisis in 14 years, while most countries in the Southeast Europe region have ... more

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... more

INVISIBLE HAND: Rhetorical wizard Draghi conjures up a QE battle

Liam Halligan in London -   Mario Draghi is being hailed, once again, as a rhetorical wizard. The president of the European Central Bank has done it again. After the October meeting of the ECB’s ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.