August 10, 2021: -Shares of food delivery firm Deliveroo climbed over 10% Monday after the company announced enormous German rival Delivery Hero had taken a 5.09% stake in the business.

On Monday, the firm’s stock climbed from £3.36 per share to £3.60 per share in early deals on the London Stock Exchange, reaching their highest point since trading started in March. Although, shares of Delivery Hero remained relatively flat on the Frankfurt Stock Exchange.

The market value of Deliveroo is nearly £8 billion, so Delivery Hero’s investment appears to be worth around £400 million. Deliveroo declined to comment on the exact size of the investment.

Deliveroo said to the investors it is receiving a notification “of major holdings in the shares of the company from Delivery Hero after market close on August 6, 2021.”

Founded in 2013 by Will Shu and Greg Orlowski, Deliveroo was boosted by Amazon in 2019 when the e-commerce giant is leading a $575 million funding round into the company.

There was a loss of £223.7 million on revenues of £4.1 billion in 2020, which is lesser the £317 million it lost on £2.5 billion of revenue in 2019.

Deliveroo was public in March, and while trading got off to a bumpy start, the share price of the company has recovered somewhat since then.

Delivery Hero’s investment comes from a period of consolidation in the food delivery market.

London-headquartered Deliveroo and Berlin-based Delivery Hero are two of the largest food delivery companies in Europe, and they’ve been fighting for market share in countries all over the continent and beyond for almost a decade.

Delivery Hero, considerably larger than Deliveroo with a market cap of around 30 billion euros, also holds minority stakes in food delivery companies including Glovo, Eat Takeaway, Rappi, and Zomato.

Niklas Östberg, Delivery Hero’s co-founder and CEO, said on Twitter that Deliveroo “felt undervalued,” which adds that he has “huge respect” for Shu and his team. Since April, delivery Hero has been acquiring shares, and it has paid an average of £2.70 per share, Östberg said.

It is competing with Deliveroo in the Middle East through its Talabat business and in Hong Kong and Singapore through its Foodpanda division.

Deliveroo and Delivery Hero don’t compete in the U.K., which is Deliveroo’s primary market. That’s because Delivery Hero sold its U.K. business, Hungryhouse, to Just Eat in 2016 for nearly £200 million.

As UberEats and DoorDash, Deliveroo, and Delivery Hero are relying on an army of self-employed couriers to deliver food from restaurant kitchens to people’s homes and offices in cities worldwide in around 30 minutes, which takes a cut on each order in the process.