After nearly going bankrupt, Deliveroo prepares $12 billion IPO in London
The IPO of the British delivery app Deliveroo can become one of the biggest public openings of the London stock exchange in the last 10 years, surpassing the commodities giant Glencore.
On Monday, March 22, the company set its stock price range between £3.90 and £4.60, which could lead to a valuation of between £7.6 billion and £8.8 billion (approximately $10.5 billion and $12.2 billion).
Deliveroo’s goal is to raise £1 billion ($1.4 billion). The startup also set aside £50 million (approximately $70 million) in shares for its consumers. Taking advantage of the growing interest of retail investors, the company is advertising the IPO in its app, encouraging customers to buy the papers.
“As we become a publicly traded company, we will continue to invest in innovation, develop new technological tools to support restaurants and food stores, offer more work to deliverers and increase the options available to consumers,” said founder and CEO, Will Shu , in a statement.
The date for the IPO has not yet been set. The company’s plans to go public were announced in early March and are expected to happen sometime in April. Deliveroo’s success was driven by increased demand during the pandemic. After years of operating in the red, Will Shu’s company became profitable in the second half of last year.
In addition to food delivery, the app allows its consumers to buy supermarket products and the modality already represents 10% of the company’s revenue. In 2020, the company’s turnover was £1.2 billion ($1.7 billion), up 54%. In the period, the company handled £4.1 billion (approximately $5.7 billion) in orders for restaurants and supermarkets, an increase of 64.3%.
In the UK alone, Deliveroo has around 50,000 registered deliverers. Last year, 20,000 new restaurants became part of the platform. Today, the customer has more than 30 thousand options. Another 36 supermarket chains and food stores also started offering their products on the startup’s app.
Despite the good result in the second half of 2020, the company closed the year in the red, with losses of £223.7 million (approximately $310 million).
At the start of the pandemic, however, Deliveroo almost went bankrupt, which caused the UK antitrust authorities to give the go-ahead for a $575 million investment in a round led by Amazon, which now owns a slice 16% of the startup. Amazon’s investment had been announced in May 2019, but has been suspended by antitrust authorities, who have raised concerns about competition.