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DoorDash has agreed to buy food delivery company Deliveroo in a £2.9bn deal, ending the UK group’s tumultuous time on the public markets.

San Francisco-based DoorDash said it would pay 180p a share in cash for the UK group, which has struggled since it listed in London four years ago with a £7.6bn valuation.

The deal will see Deliveroo become the latest UK company swallowed by a US rival, in a blow to the London market and the country’s tech industry.

Deliveroo, which operates a food delivery app in nine countries, has faced stiff competition from rivals including Uber Eats and reported its first full year profit in March.

Consolidation is gathering pace in the food delivery sector as companies bet that increasing size will help them grow.

Earlier this year, Prosus — the European investment arm of South African group Naspers — struck a €4.1bn deal to take Europe’s biggest food delivery group Just Eat Takeaway private.

Deliveroo and DoorDash said on Tuesday that their boards had agreed the final terms of the cash deal.

DoorDash’s operations are focused in the US, Canada, Australia and New Zealand and do not overlap with those of Deliveroo, which was founded by chief executive Will Shu in 2013.

The Financial Times previously reported that DoorDash hoped the lack of overlap meant the deal would not be blocked by competition regulators.

DoorDash has expanded abroad, notably through a €7bn all-stock deal for Finnish delivery app Wolt in 2021. The company operates in more than 30 countries.

On Tuesday, DoorDash also announced plans to buy restaurant booking platform SevenRooms for $1.2bn, as part of a push to tighten its grip on the food delivery and restaurant services market. The deal will be an all-cash transaction, and is expected to close in the second half of the year.

Deliveroo’s acquisition by DoorDash brings to an end a challenging time for Deliveroo as a UK-listed company: its shares fell sharply after its 2021 initial public offering and never recovered.

Despite the difficulties, which have seen Deliveroo’s share price fall more than 50 per cent since its £3.90 listing price, Shu told the FT he was “really proud” of what the company had achieved during its time on the public market.

He added that the DoorDash deal was “the beginning of a transformative new chapter” for Deliveroo — the US group is about 30 times its size based on market capitalisation.

“The enlarged group will have the scale to invest in product, technology and the overall consumer value proposition,” he said. Shu said no decisions had yet been made on his role in the future company, or on any potential branding changes.

Tony Xu, chief executive and co-founder of DoorDash, said the deal would bring together “DoorDash’s strong operating playbook with Deliveroo’s local expertise”.

Both companies have been expanding into grocery and other types of retail delivery and developing their advertising businesses to boost profitability.

Sean Kealy, analyst at Panmure Liberum, said Doordash’s intention to increase investment in Deliveroo indicated that the deal was designed to “support competitiveness in its markets”.

“[It is] a clear indication that DoorDash is acquiring the business to accelerate its growth,” he said.

DoorDash announced its SevenRooms deal alongside first-quarter earnings. DoorDash posted a gross order value — reflecting total transactions on the platform — of $23.1bn, slightly above consensus estimates in a survey by S&P Visible Alpha of $22.9bn.

Revenues were $3.03bn, just below analysts’ expectations of $3.1bn, but DoorDash reported net income of $193mn, above the consensus of $169mn. The company forecast it would generate between $23.3bn and $23.7bn in gross order value in the second quarter, slightly above market projections of $23.3bn.