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Beeneet Kothari, Tekne Capital Management - Stock tip: Delivery Hero

Cliona O'Dowd and Glenda Korporaal,
The Australian
Dec 3, 2021

Beeneet Kothari of Tekne Capital Management has chosen Delivery Hero as his stock pick at the Sohn Hearts & Minds conference, saying it is the best way to play the innovation and last-mile logistics trend.

Mr Kothari, whose pitches in the last three Hearts & Mind conferences have delivered on average returns in excess of 80 per cent, described the markets for on-demand delivery as “enormous”.

“When you add up groceries, apparel and electronics, we’re talking about a market that has tens of trillions of dollars at stake.

“And there is a new breed of last mile logistics infrastructure companies that are purpose built for on-demand delivery, and our new e-commerce world.”

Delivery Hero is a European multinational online food-delivery service based in Berlin, Germany and listed on the Frankfurt stock exchange. It covers more than 50 countries and 1.7bn people and is the number one player in 95 per cent of its markets.

“Most meaningfully it is founder-led. That means the management team and the CEO and founder have an owner’s mentality, and they invest for the long run. This is probably the best management team in the business,” Mr Kothari said.

“This CEO saw the transition in last mile logistics and concluded that he could either disrupt himself, or be disrupted. Four years ago, Delivery Hero made a huge strategic move from being a third party player to a first party logistics provider.

Mr Kothari compared the transition Delivery Hero is making to similar transitions made by Netflix and Facebook.

“And the stock trades at a massive discount to its peers: A third of the multiple.

“We think there’s potentially more than 400 to 500 per cent upside in this stock for the patient investor.”

This article was originally posted by The Australian here.

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