Food Delivery Business Deliveroo Seeks Valuation of $12 Billion in Its Upcoming London IPO

By Mariliana Fotopoulou Monday, March 22, 2021

A Deliveroo courier on a bike.

Deliveroo, the London-based food delivery business backed by ecommerce business titan Amazon, has announced pricing for its upcoming initial public offering (IPO).

Ambitious IPO Plans

Deliveroo set a price range of between £3.90 ($5.40) and £4.60 ($6.37) per share for its IPO. At this price range, Deliveroo is seeking a business valuation of between £7.6 billion ($10.53 billion) and £8.8 billion ($12.19 billion), the company said in a filing.

Deliveroo’s public offering is likely to become one of the biggest British IPO in years. The company is aiming to sell £1.77 billion ($2.45 billion) worth of shares by the end of the month. In September of last year, the ecommerce company THG raised £1.88 billion ($2.60 billion).

“Becoming a public company will enable us to continue to invest in innovation, developing new tech tools to support restaurants and grocers, providing riders with more work and extending choice for consumers, bringing them the food they love from more restaurants than ever before,” said William Shu, the founder and CEO of the company.

The food delivery business also said it has started taking offers from investors, a process that will last until March 30, with the stock set to start trading a day later. The raised IPO proceeds will be used by the company to improve its food delivery platform and push deeper into on-demand grocery deliveries.

“Bringing the food category online represents an enormous market opportunity,” the company said in a statement.

Earlier this month, Deliveroo announced it had selected the London Stock Exchange as a host for its much-anticipated IPO. Furthermore, the business has opted for a time-limited dual-class share structure, which is designed to give founders and company leadership more control in the boardroom.

“Deliveroo has created thousands of jobs and is a true British tech success story. It is great news that the next stage of their growth will be on the public markets in the U.K.,” Rishi Sunak, the Chancellor of the Exchequer, said.

The food delivery business reported a loss of £224 million ($310.1 million) for the last year despite a growth of 54% in sales. In an IPO filing, Deliveroo stated it is serving more than 6 million customers and has a partnership with over 115,000 restaurants and shops.

In 2020, the company recorded a gross transaction value of £4.1 billion ($5.68 billion), representing a jump of 64% compared to a year-ago period. As a result, the food delivery business has been profitable in two quarters of the last year, with the full-year profit soaring 89.5% to £358 million ($495.6 million).

The gross transaction value has continued to soar in 2021, with the food delivery business saying today that this metric more than doubled in January and February of this year. In the UK, volumes soared by 130% on a year-over-year (YOY) basis.

Summary

Food delivery company Deliveroo is seeking a business valuation of up to $12.19 billion in the upcoming London IPO. In today’s statement, the company said it is looking to sell $2.45 billion worth of shares.

About the Author


Headshot of Mariliana Fotopoulou

Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.

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