Trying to see around the corner is never easy but the set up for gen 1 food delivery marketplaces in 2021/2022 seems pretty attractive.
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The full/partial unwind of virus life behavior may make marketplaceβs relative growth rates much more attractive vs the past year.
Re-urbanization and resumption of suburban pre-virus dining patterns may remind investors that marketplaces arenβt quite dead yet.
In fact there may be some things to like about them...
They clearly generate cash flow and there is no doubt about underlying profitability despite current consolidated results being less profitable.
A profit pool comes in handy when capital markets catch a cold which they invariably always do.
Tightness on the supply side (restaurant capacity & delivery personnel for all) may be a feature of 2021/22 but marketplaces ability to bend demand toward adequately staffed, self-delivery options is likely privileged vs logistics.
Broadly speaking, one goes to marketplaces to eat and to logistics/delivery anything apps to get a specific thing/meal. Marketplaces ability to shift demand at the margin is high.
Consequently, the unexpected rain storm in Chicago pressures a logistics operator > a marketplace operator. Yes logistic operators can bend demand as well but not like marketplaces can right now.
The marriage - or organic creation - of scaled marketplaces and logistic operators in a given geographic will eventually create a formidable enterprise.
If and when the South American river turns on the heat in local commerce/delivery + new participants lean into the space for growth then it will likely be open season for additional M&A that is currently off the table.
There should be plenty of opportunity for shareholder oriented mangement teams to mix and match their way to increased value.
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