Deliveroo’s IPO set to value the company at up to £8.8bn

22 Mar 2021

Image: ifeelstock/Depositphotos

The Amazon-backed food delivery firm will float on the London Stock Exchange in one of The City’s biggest listings this year.

Online food delivery player Deliveroo has tipped that its upcoming London IPO will value the company at up to £8.8bn.

The company, which announced its plans to go public a few weeks ago, said it would price its shares at between £3.90 and £4.60, giving it a valuation of between £7.6bn and £8.8bn. This is higher than the £7bn figure that was bandied around in recent weeks.

Deliveroo’s listing is expected to be one of the biggest for the City of London this year and a vote of confidence in the London Stock Exchange as a listing venue post-Brexit.

Will Shu, the company’s chief executive, said that Deliveroo has seen a strong start to 2021, compared to 12 months ago.

“Becoming a public company will enable us to continue to invest in innovation, developing new tech tools to support restaurants and grocers,” he added.

Shu owns a 6.2pc stake in the company and he is expected to sell a portion of this stake in the flotation, according to Sky News.

In January and February this year, Deliveroo’s gross transaction volume, which measures the number of orders it receives on the platform, was up 121pc compared to a year prior. In the UK and Ireland markets, that increase was 130pc.

Its fortunes have turned around greatly in the last 12 to 18 months, when Amazon’s large investment in the company was in jeopardy and it juggled the soaring demand for online food ordering during lockdown.

Jeff Bezos’s e-commerce giant invested in Deliveroo as part of a $575m funding round in 2019 but the UK’s competition regulator stepped in to probe the deal and assess its fairness. Deliveroo said that without the significant investment, it was at risk of running out of money and going under.

The UK Competition and Markets Authority eventually approved the deal last year, giving Deliveroo the means to carry on and now pursue an IPO.

As the company opened up its books ahead of the listing, it revealed losses of £233.7m in 2020, a decrease on the losses of 2019, while the volume of transactions it processed in 2020 was £4.1bn, up from £2.5bn.

It raised a further $180m from investors in January.

Jonathan Keane is a freelance business and technology journalist based in Dublin