FILE PHOTO: The Delivery Hero’s logo is pictured at its headquarters in Berlin, Germany, August 18, 2020. REUTERS/Fabrizio Bensch

BERLIN (Reuters) – Germany’s Delivery Hero DHER.DE has agreed to buy online grocery marketplace InstaShop for an initial $270 million, as it branches out of online takeaway meals into new services.

Delivery Hero, catapulted this week into Germany’s blue-chip DAX index .GDAXI less than a decade after its founding, has been one of the winners of the COVID-19 pandemic as more people order in meals due to lockdowns.

InstaShop, launched in 2015, operates in the United Arab Emirates, Qatar, Bahrain, Egypt and Lebanon and has an annualised gross merchandise volume of $300 million, Berlin-based Delivery Hero said.

Depending on future growth and profitability, the deal could value InstaShop at $360 million.

The Dubai-based firm will continue to operate as an independent brand under current leadership, Delivery Hero said.

The German firm’s shares were down 1.4% in mid-morning Frankfurt trade, the biggest fall on the DAX.

Berenberg analyst Sarah Simon said the market was unclear about the potential for the grocery ordering business.

“People are concerned that the company is pushing even further beyond the core online food marketplace activity,” she said.

Delivery Hero raised its 2020 sales forecast last month after coronavirus lockdowns and investment in ultra-fast deliveries boosted quarterly figures.

Reporting by Riham Alkousaa, Linda Pasquini and Nadine Schimroszik; additional writing by Tom Sims; editing by Maria Sheahan and Mark Potter