Deliveroo Says It Lost $310 Million in 2020 as It Prepares for April IPO

By Mariliana Fotopoulou Monday, March 8, 2021

Deliveroo, the popular London-based food delivery company, announced it recorded a loss of more than $300 million in 2020 ahead of its IPO, or initial public offering, in April.

Sign outside of restaurant that says, "We are on Deliveroo."

Deliveroo Still Chasing Profits

The food delivery company lost £224 million ($310.1 million) in 2020, although it witnessed a sales growth of 54% amid the pandemic-driven surge in demand for food delivery services. The Financial Times announced last week the company is seeking a valuation of about $10 billion ahead of its IPO in early April.

In a filing announced today, the delivery business showed it served over 6 million customers, who ordered food from more than 115,000 restaurants and stores. The gross transaction value, mostly driven by customers’ spending, jumped as much as 64% to £4.1 billion ($5.68 billion) last year.

Furthermore, net revenues — mostly driven by fees charged to restaurants, stores, and consumers — rose 54% to £1.2 billion ($1.66 billion) compared to a year ago. In this space, net business revenue grew 65% to £599 million ($892.3 million).

On an adjusted EBITDA basis, the delivery business recorded a profit over two quarters. Underlying gross profit surged 89.5% to £358 million ($495.6 million) compared to £189 million ($261.7 million) in 2019.

Given the rapid expansion and growth rate it recorded in 2020 amid the pandemic, the company
“remains focused on investing in driving growth in a nascent online food market.”

“Our ambitions have increased as we start to truly understand and execute on the opportunity in front of us in online food,” co-founder and CEO William Shu said.

Startup Savant reported last week that Deliveroo picked London for its IPO. The delivery business has chosen a dual-class share structure, which gives founders a bigger say in voting terms.

“Deliveroo was born in London. This is where I founded the company and delivered our first order. London is a great place to live, work, do business and eat. That’s why I’m so proud and excited about a potential listing here,” said Shu in a statement.

The London-based company is backed by Amazon and Fidelity, among others. The ecommerce business titan was forced to wait for a green light from the British regulators before being able to finalize a deal to buy a 16% stake in the delivery business.

The upcoming April IPO will be led by Goldman Sachs and JP Morgan.

Summary

Deliveroo, a food delivery business that has scheduled a London IPO for April, posted a loss of over $300 million despite a soaring gross transaction value of 64% to £4.1 billion ($5.68 billion) last year.

About the Author


Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

Related Articles