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Hungryhouse Dragons’ Den Update

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Ordering food online is like a reflex action for most of us now but do you remember the time when smartphones didn’t exist?

Or the time when you used to fire up your laptop or PC to access the world of the internet! Food ordering in those days was limited to tele-ordering. In this long past era, Hungryhouse came up with its online food ordering website. 

Hungryhouse.co.uk was an online takeaway food order and delivery service founded in 2006 and merged with Delivery Hero in 2016 and later acquired by JustEat in 2018.

It allowed users to search for restaurants and browse local takeaway menus before placing an order online and being delivered by the restaurant with a small service charge.

Slippin’ away some cash from hungry people is one thing but can the founders get the well-fed Dragons to infuse the much-required cash in Hungryhouse?

Hungryhouse at a Glance: 

IdeaOnline food delivery service
FoundersShaun Lake and Tony Charles
Asked For£100,000 For 11%
Accepted Deal£100,000 For 50% conditionally reducible to 30%
DragonsJames Caan and Duncan Bannatyne
Business statusAcquired
Episode No.Season 5, Episode 5

Index:

What is Hungryhouse?

Hungryhouse, founded in 2006 was the UK’s first online food delivery service. It charged a small fee from its customers and a commission from the restaurant partners to generate income for itself. The delivery was made directly by the restaurant partners initially.

Later on, Hungryhouse itself started providing end-to-end services from the restaurant to the customer. The London-based food delivery company turned over millions in revenues throughout its years of operation but it always bled gigantic losses never proving it to be a successful business. It was eventually acquired at a terribly high price in 2018 before being defunct in the same year. 

Who are The Founders Of Hungryhouse?

Hungryhouse’s cofounders were Shaun Lake and Tony Charles. Both of them had a B.Sc. in computing science from the University of Technology Sydney. They were the backbone of the tech end of the company initially. The founders made a fortune when Hungryhouse was acquired by the German food delivery company Delivery Hero. 

Both the founders are now angel investors and well-known names in the industry. They proved that the Dragons who thought that their idea was redundant were incorrect Apart from this, their biggest failure was that Hungryhouse never made even a shilling in profit and bled money like a punctured vein throughout its period of existence.

Did Hungryhouse Get A Deal On Dragons’ Den?

The founders presented an average and boring pitch in the Den which failed to make Dragons realize the value of their offering. This put them behind even when Hungryhouse would turn out to be a milestone in the multibillion-pound food delivery industry.

Three Dragons completely wiped James and Duncan out by reasoning that there was absolutely nothing unique in their venture and that a similar and better business identical to theirs could be set up in less than a month.

This fact indeed was proven by their Danish competitor who went on to sign four times more restaurants than Hungryhouse even after entering the UK a month later than them.

The revenue that Hungryhouse generated lured the two Dragons in with a combined offer of £100,000 for 50% equity. The founders were hesitant in offering such a huge stake to someone in their business that early.

Consequently, they reached an agreement with the Dragons which implied that the equity intake by them would reduce to 30% if Hungryhouse met the financial targets set by the founders.

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What Happened to Hungryhouse After Dragons’ Den?

The much-celebrated deal at the Den never closed. The founders received a much better offer from an angel investor, implying a capital infusion amounting to £150,000 at a much better valuation.

This also proved to be a lifesaver for the founders as Hungryhouse never met its profitability targets even till the day it got defunct. Simply put, Hungryhouse made a mockery of the word ‘profit’, a word in English that simply means making more money than you lose.

The founders forecasted revenue of £430,000 for the first year when they walked into the Den. Grass proved to be more than greener on the revenue side for Hungryhouse with the company touching £16 Million in revenue in 2016. The losses however were enormous throughout the years of operation; the company lost more than £25 Million in just four years i.e. from 2013 to 2016.

Hungryhouse was acquired by the German food delivery giant Delivery Hero in 2016 and eventually, it was acquired by Just Eat in 2018 which turned out to be the last year of Hungryhouse’s operations. All the customers have since been redirected to JustEat. Though the company became a huge player in its segment, it wouldn’t be an exaggeration to call it a failed business because of its non-existent profitability.

Product Details:

  • Hungryhouse was an online food delivery service.
  • It allowed its customers to select from a variety of restaurants.
  • The website interface was extremely easy to use.
  • It provided huge discounts to its customers.
  • The customer service was top-notch throughout.
  • The Food delivery service entirely merged with Just Eat in 2018.

Competitors of Hungryhouse:

Hungryhouse may have been an early mover in the food delivery industry in the UK but the case was different globally, where food delivery startups were touching revenues of $100 Million even before Hungryhouse was set up.

Just after a month of setting up shop, Hungryhouse encountered its first adversary in a Danish food delivery service which at that point was much larger than Hungryhouse launched itself in the UK. Fast forward a few years multiple companies entered the food delivery business like:

Hungryhouse nonetheless managed to keep a share of the market which made the giants like Delivery Hero and JustEat acquire it.

What Is The Net Worth of Hungryhouse?

At the time Hungryhouse was featured in the Dragons’ Den, the founders put forth an offer to the Dragons which valued the company at more than £900,000 but the Dragons valued the company at merely £200,000.

After the Dragons’ Den deal fell apart, the valuation of the company grew despite its gigantic losses and went on to rise to a behemoth £200 Million, which was the cost at which it was acquired by JustEat in 2018.

Is Hungryhouse Still In Business?

No, Hungryhouse seized operating in 2018 upon its acquisition by JustEat with all the customers getting redirected to the JustEat website. This seemed foolhardy as £200 Million is a ridiculous amount just to get a company to stop operating. 

A similar situation occurred in the food delivery industry in India where a food delivery company called Zomato acquired UberEat’s India business just to make it go off the market a year later in 2019. 

Profitability remains a distant dream for all these food delivery companies be it the UK, India, or anywhere else in the world. 

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FAQs:

What is Hungryhouse ?

Hungryhouse, founded in 2006 was the UK’s first online food delivery service. It charged a small fee from its customers and a commission from the restaurant partners to generate income for itself. The delivery was made directly by the restaurant partners initially.

What's the net worth of Hungryhouse?

The founders put forth an offer to the Dragons which valued the company at more than £900,000. Hungryhouse’s final valuation was £200 Million in 2018 after this the company was defunct.

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