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