Baemin becomes Uber’s corporate grandchild

Lee Chul-min

The author is the managing partner of VIG Partners.

On July 16, Uber announced plans to acquire Germany’s Delivery Hero, one of the world's largest food delivery companies, for approximately 13 billion euros ($14.8 billion). Because Delivery Hero owns a controlling stake in Woowa Brothers, the operator of Baemin, short for Baedal Minjok, the deal will effectively make Korea's largest food delivery platform an indirect subsidiary of Uber once the acquisition is completed.

The name Baemin is a play on words: while baedal means “delivery,” Baedal Minjok has also long been used as another name for the Korean people. The memorable branding helped Baemin rise to become the country's leading food delivery platform. Pending approval from German regulators, the transaction is expected to close in the second half of 2027.

Delivery Hero acquired Woowa Brothers in 2019 for about 4.7 trillion won ($3.12 billion). At the time, the acquisition was widely viewed as a stepping stone for Baemin’s global expansion. Instead, Delivery Hero focused on easing its own financial burden, recovering substantial cash from Baemin through dividends and other means. During those years, Coupang Eats expanded rapidly, eroding Baemin’s market share and intensifying competition. The company’s deteriorating performance also increased pressure on Delivery Hero's management.

One aspect of the deal deserves particular attention. While Delivery Hero had reportedly explored selling Baemin at a valuation of roughly 8 trillion won to alleviate its financial difficulties, Uber instead chose to purchase the entire parent company for 22 trillion won. In doing so, it acquired not only Baemin but also dozens of other delivery businesses across multiple regions.

Although Uber Eats overlaps with Delivery Hero operations in 14 markets, the acquisition also includes 36 delivery platforms outside those overlapping businesses. They include Talabat in the Middle East, PedidosYa in Latin America, HungerStation in Saudi Arabia and foodpanda across Asia. Rather than negotiating separately for each asset, Uber secured an extensive global portfolio through a single transaction.

The acquisition highlights an important lesson in corporate strategy. A company seeking a valuable business does not always need to purchase that business directly. When the parent company controlling the asset is weakened by financial strain or leadership instability, acquiring the entire group may prove more efficient than buying the subsidiary alone.

Uber appears to have executed exactly that strategy. It first accumulated a 36.83 percent stake in Delivery Hero, then capitalized on the company's financial and managerial difficulties to pursue a full takeover. Timing, as much as valuation, became a decisive factor.

Beyond the logic of global consolidation, Uber’s decision may also reflect unfinished business in Korea. The company withdrew from the Korean food delivery market in 2019 because of profitability concerns. Since then, however, the market has expanded into an industry worth roughly 30 trillion won annually, becoming one of the world’s most mature and deeply integrated food delivery markets.

Baemin’s appeal extends far beyond its market share. The platform possesses tens of millions of user accounts, a nationwide rider network and highly refined delivery algorithms built over years of operation. Combined, those assets represent an infrastructure that would be difficult for any global competitor to replicate from scratch. Access to such capabilities may have been as valuable to Uber as the platform itself.

Does this mean Baemin’s prospects have finally improved? There are reasons for cautious optimism. As part of Uber, the company could escape the persistent pressure to generate cash for its parent, a burden that has weighed on it for years. It may also benefit from Uber’s global logistics network, advanced delivery technologies and future autonomous delivery initiatives.

That said, the competitive landscape within Korea is unlikely to change dramatically. The rivalry with Coupang Eats will remain intense, and consumers are unlikely to see immediate changes in pricing or market structure simply because ownership has shifted.

Ultimately, the fate of a company is shaped not only by the quality of its business but also by the character and priorities of its controlling shareholder. Baemin’s journey illustrates that building a successful business is only part of the equation. Choosing the right owner can be just as important in determining its long-term future.