Deliveroo’s sales have doubled, but losses at the firm have shot up to nearly £185m.
Privately owned Deliveroo says an increase in losses of 43pc comes after it invested approximately £106m more in 2017 than 2016, in projects including pop-up kitchens and a new head office.
A mixed bag
According to Reuters, the company’s pre-tax losses in the financial year ending 31 December 2017 increased to £184.7m, while revenue rose to £277m in 2017, up from £128.5m in 2016.
According to the Financial Times, European sales rose 99pc compared with an increase of 207pc across other international markets. Revenue growth outpaced growing expenses, meaning gross margins increased to 23pc – a major change from previously razor-thin margins (1pc).
Last year, Deliveroo raised enough funding to become a designated ‘unicorn’ company valued at more than $2bn and it is now working with 50,000 restaurants and 50,000 riders across the globe. Expansion this year has included new pop-up kitchens in France, the Netherlands and Hong Kong, among other locations. The firm hopes to have 250 kitchens open globally by the end of 2018.
The company also invested £10m to offer riders free accident and injury insurance as well as third-party liability insurance, after unions applied some pressure.
Irish arm showing profitability
According to The Irish Times, the Irish arm of Deliveroo increased sales by more than 76pc last year. In Ireland, the company increased turnover to €5.1m from €2.9m in the year ending December 2017. The UK-incorporated parent firm, Roofoods Limited, invested €2.3m in the Irish business last year.
In September, Bloomberg reported that Uber was making a play for Deliveroo for several billion dollars, in an attempt to dominate the food delivery market in Europe. According to sources close to Deliveroo, the company would not agree a selling price of less than $4bn in cash from Uber. E-commerce giant Amazon also made two preliminary approaches for the company, according to The Telegraph.
Deliveroo founder Will Shu said: “We want to become the world’s definitive food company and we have invested heavily in innovation, technology, people and restaurants.”
“We are changing the way people eat and helping restaurants expand to new areas and in new ways.”
Yesterday (1 October), The Telegraph reported that Deliveroo is considering going public in 2020 and wants to be able to demonstrate profitability to potential investors in the coming months.