| Christian Leone of Luxor Capital |
Christian Leone clearly has a thing for online food delivery companies — and it has paid off for him in a big way.
His hedge fund firm’s largest individual U.S. stock holding is Grubhub, the Chicago-based delivery service. The stock is up 20 percent this year, even after losing about 5 percent on Monday alone. Last year it surged about 55 percent. In late April the stock popped after the company issued a particularly strong quarterly earnings report.
Now, Leone is poised to enjoy a big windfall when another food delivery company goes public on Friday on the Frankfurt Stock Exchange. Delivery Hero — an online and food delivery company headquartered in Germany that serves more than 40 countries in Europe, the Middle East, and North Africa (MENA); Latin America; and the Asia-Pacific region — is looking to raise nearly $1 billion in its IPO. This would value the company at nearly $5 billion.
Leone’s $3 billion hedge fund firm, Luxor Capital Group, owns 9.7 of the shares of Delivery Hero. Luxor plans to sell more than 1.2 million shares in the offering, leaving it with more than 13.5 million shares. It also has loans to the company, which will be repaid with part of the proceeds from the IPO.
Delivery Hero was valued at more than $500 million when Luxor made its last investment, according to a person with knowledge of the investment. In February 2014, Luxor led a Series F round of financing for Delivery Hero, and in April 2014 it made an additional investment in the company. In December 2013, Luxor led a Series B funding round for Foodpanda Group. In late 2016, Foodpanda and Delivery Hero merged. Luxor partner Jonathan Green sits on the board of directors of Delivery Hero.
Another hedge fund firm with a private investment in Delivery Hero is also unloading shares in the IPO. Falcon Edge Capital’s Falcon Edge Global Master Fund plans to sell 134,068 shares.
Other major investors in Delivery Hero include Rocket Internet SE, a publicly traded investment firm, and Naspers, a South Africa–based multinational conglomerate that invests in e-commerce businesses and only recently made an investment in the company.
Despite these big gains, the food delivery business is considered to be very competitive and heating up even more. In May a report surfaced suggesting that Facebook is strongly considering getting into the fray. Meanwhile, Grubhub already competes with Amazon.com’s Prime Now and Yelp’s Eat24. Delivery Hero is also said to be facing stiff competition, particularly from the Dutch company Takeaway.com Holding.
Leone founded Luxor in 2002 with seed capital from Richard Perry’s Perry Capital. It focuses on what it calls nonconsensus internet ideas and distressed-debt opportunities.
The firm’s Luxor Capital Partners Offshore is up 11.7 percent this year through May after posting a 12.2 percent gain last year. Gains this year have been driven by Recruit Holdings Co., a Japanese information services company; Mindbody, a provider of cloud-based business management software; and Grubhub.
