Deliveroo expects to raise $1.3 billion at a $12 billion valuation in its initial public offering on the London Stock Exchange as its rides a boom in home food delivery fuelled by Covid-19 lockdowns.
The IPO, one of the largest in the U.K. in recent years, will price shares at between £3.9 and £4.6 a share, according to listing documents filed with the London Stock Exchange on Monday. The Amazon-backed business said food delivery orders had soared 121% in January and February versus the same period of last year with restaurants shuttered across swathes of the U.K. and Europe.
“We are proud to be listing in London, the city where Deliveroo started,” Will Shu, CEO and founder, said in a statement. “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.”
The business will have a dual share class structure that means Shu’s share will have 20 times the voting rights of other investors. This structure, which will expire after three years, means that Deliveroo cannot be included in the FTSE 100 benchmark under the LSE’s current listing rules.
Delivery riders clad in Deliveroo’s teal windbreakers have become a ubiquitous feature on the streets of London, and cities across the United Kingdom, Europe, and the Middle East but the business has yet to turn a profit and faces grinding competition from Uber Eats, Just Eat, and local rivals.
The IPO will cap a rollercoaster year for the business, founded by former American banker Shu, in 2013, after it warned that it was on the brink of collapse in April 2020. Deliveroo issued the warning after the U.K.’s anti-trust watchdog opened a probe after Amazon invested $575 million in the startup for a reported 16% stake.
The startup has also promised a £50 million ‘community fund’ as part of the IPO that could salve its sometimes fraught relationship with its restaurant partners’ grumbles over fees, and moves to open its own ‘ghost’ kitchens, and its army of self-employed delivery riders. IPOs are normally restricted to institutional investors but a £50 million tranche of shares have been set aside for the app’s customers who can buy up to £1,000 each.
Danish reviews website Trustpilot also announced plans on Monday to list on the London Stock Exchange at a $1.4 billion valuation. The blockbuster listing of Kaspi and The Hut Group last year appear to have ended London’s long IPO drought and London-based cybersecurity startup DarkTrace and Wise (formerly Transferwise) are also tipped to make a stock market debut in 2021.
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March 22, 2021 at 10:54PM
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Deliveroo IPO Values British Delivery Startup At $12 Billion - Forbes
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