Amazon-backed Deliveroo could be headed to a blockbuster IPO that values it above $13 billion in April

Deliveroo CEO Will Shu

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Amazon-backed British food delivery firm Deliveroo could be headed for a blockbuster IPO in the spring at a valuation of £10 billion ($13.6 billion), according to two industry sources.

One of the people said the float could take place in April.

Since Deliveroo is likely to be embarking on discussions with potential investors, which will influence its IPO price, both the target valuation and float date may change.

Listed rival Just Eat has a market cap approaching €15 billion ($18.2 billion), Delivery Hero’s market cap is around €26 billion ($32 billion), while US peer DoorDash closed Wednesday with a market cap of $62.9 billion.

Deliveroo declined to comment on its IPO.

Sky News separately reported on Wednesday that Deliveroo was expected to be valued above £5 billion ($6.8 billion), and that it added Bank of America Merrill Lynch, Citi, Jefferies and Numis to its existing roster of banks, led by JP Morgan and Goldman Sachs.

Deliveroo is headquartered in the UK and competes with the likes of Uber Eats in Europe and parts of Asia. It offers food, alcohol, and grocery deliveries on demand via an app, relying on a network of gig-economy cyclists and motorcyclists to ferry items to customers.

It was founded in 2013 by American Will Shu, formerly an investment banker, and his childhood friend Greg Orlowski. Orlowski left in 2016, and Shu remains CEO of the business.

The firm is one of the UK’s most prominent startups, and a London listing will be a feather in the cap for the British tech sector, which has boasted few high-profile local floats. European tech firms are seeking to share in the successes of US firms that had a record breaking year for IPOs in 2020. 

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It would also mark a turnaround for Deliveroo.

The company raised $575 million in 2019, led by Amazon, but was denied access to the funding after the UK’s competition regulator put the deal on hold on antitrust grounds.

When the coronavirus pandemic hit the UK in March, Deliveroo warned it might collapse as restaurants shuttered during a nationwide lockdown. It also laid off around 300 staff to reduce costs.

The regulator eventually cleared the funding in April 2020, concluding there was no antitrust threat from Amazon’s involvement.

As consumers turned to delivery apps during lockdown, Deliveroo experienced a boom. The company subsequently said it became “operationally profitable” in 2020. Its most recent publicly available financials showed a hefty loss for 2019 as well as expanded revenue and improved margins.

Deliveroo restructured its marketing operations towards the end of 2020, putting the business under comms chief Thea Rogers, who took up the role of chief communications officer.

CEO Shu said in November that the company would focus on doubling its “Editions” sites globally, otherwise known as dark kitchens. The firm will also focus on building out its monthly subscription offering, Deliveroo Plus, and deepen its focus on grocery delivery. Earlier in the week, Deliveroo said it would launch in 100 new UK towns, boosting its potential reach to …read more

Source:: Business Insider

      

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