A Deliveroo courier drives along Regent Street delivering takeaways in central London during Covid-19 Tier 4 restrictions.
Pietro Recchia | SOPA Images | LightRocket via Getty Images
LONDON – Food delivery service Deliveroo wants to raise £ 1bn ($ 1.4bn) by selling new shares in the forthcoming initial public offering on the London Stock Exchange.
The company announced on Monday that some of its existing shareholders will also sell some of their shares.
In addition to Amazon, Deliveroo is also backed by investors, including Durable Capital Partners, Fidelity, T. Rowe Price, General Catalyst, Index Ventures and Accel.
Deliveroo also plans to offer £ 50 million to its customers.
According to a report from technology website Sifted, some early Deliveroo fans made a 60,000% return on their investment.
Deliveroo was valued at $ 7 billion in July when it raised an additional $ 180 million from investors. Reports have suggested that it could be valued at around $ 10 billion after the IPO.
Goldman Sachs and JP Morgan Cazenove have been appointed as the joint global coordinators for the IPO. A date on which the initial public offering was not officially announced is likely to be within the next few weeks.
Last week, a submission details Deliveroo’s dual-class share structure, in which Willoo Shu’s CEO will receive 20 votes per share, while all other shareholders will be entitled to only one vote per share.
Last week, the company also revealed that it had made a loss of £ 223.7 million in 2020. The losses are significantly less in 2020 than in 2019, but when London head office recorded a loss of £ 317 million.
While the eight-year-old company is still in the red, its revenue climbed to £ 4.1 billion in 2020, compared to £ 2.5 billion in 2019.
Deliveroo’s turnaround
Deliveroo nearly failed in 2020 amid a competitive edge of Amazon’s minority investment, making an operating profit by the end of the year, thanks to the rise in demand for coronavirus online takeaway services.
Today, Deliveroo claims to have more than 115,000 food retailers, 100,000 restaurants and millions of consumers in 12 countries. The submission shows that six million orders are placed on Deliveroo every month.
Amazon supports Deliveroo in May 2019 and is leading a $ 575 million financing round in exchange for a 16% stake in the business.
In July 2019, the British antitrust regulator, the Competition and Market Authority, argued that Deliveroo’s cash injection from Amazon could reduce competition by removing the possibility that the e-commerce giant would re-enter the market, while Deliveroo ‘could stop otherwise to be. “It froze the investment for almost a year while it was being investigated.
To the disappointment of competitors Just Eat and Domino’s Pizza, the deal was approved by the CMA in August after Deliveroo said it could go without the capital.
As interest in the delivery market continues to grow, UBS analysts have identified seven stocks in the sector that are expected to rise by 30%.
People who order pick-ups more often – and spend more than they do – mean that by 2024 the sector could reach a value of almost $ 400 billion. Euromonitor estimates that it could be worth $ 1 trillion in the next decade.
– Additional reporting by CNBC’s Ryan Browne.