Deliveroo reports narrowing losses as it prepares London IPO

8 Mar 2021171 Views

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The food delivery firm announced that it will make £50m worth of shares available for customers to invest in the flotation.

Ahead of a planned stock listing in London, Deliveroo saw its losses narrow last year.

The food delivery business revealed in a trading update that it reduced its losses to £223.7m in 2020, from £317m in 2019.

There has been a boom in demand in online food orders during the pandemic, with Deliveroo processing £4.1bn in transactions in 2020, compared to £2.5bn in 2019. The company said that the online food ordering business is still “nascent” with room for further growth.

Deliveroo confirmed that it would float on the London Stock Exchange this year, in a win for the city post-Brexit. The company is expected to list at a £7bn valuation.

It also confirmed that it would be making £50m worth of shares available to customers, allowing them to invest in the company at a limit of £1,000 each.

The IPO and latest financial figures are a significant turnaround for Deliveroo compared to one year ago.

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It had secured a large investment from Amazon as part of a $575m round in 2019, but the investment was held up by the UK competition watchdog, which investigated the deal throughout much of 2020 over competition concerns.

Deliveroo told the regulator that without the cash injection the company was on the verge of collapse. Ultimately the deal was approved and now the company is working towards a public listing.

Will Shu, Deliveroo’s chief executive, said that the company he founded in 2012 had become “so much bigger than I ever would have thought possible”.

“We are building delivery-only kitchens, delivering groceries, building tools for restaurants to take them into the digital age things I never contemplated when we launched. Yet we truly believe we are still getting started,” Shu said.

“Our ambitions have increased as we start to truly understand and execute on the opportunity in front of us in online food.”

Deliveroo’s IPO will see the company use a dual-class share structure, which will ensure that Shu maintains control over the company after it goes public. The structure has attracted more attention of late after a review of stock market rules published last week made several recommendations for making post-Brexit London an attractive location for tech companies to list.

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

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