A Deliveroo courier travels down Regent Street to deliver takeaway food in central London during Covid-19 Tier 4 restrictions.
Pietro Recchia | SOPA images | LightRocket via Getty Images
LONDON – Food delivery service Deliveroo aims to raise £ 1 billion ($ 1.4 billion) by selling new shares in its upcoming IPO 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 worth of shares to its customers.
Some early Deliveroo backers can get a 60,000% return on their investment, according to a report from tech media website Sifted on Monday.
Deliveroo was valued at $ 7 billion in July when it raised another $ 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 joint global coordinators for the IPO. An IPO date has not yet been officially announced, but is likely to be in the coming weeks.
A filing last week provided details on Deliveroo’s dual-class share structure, giving Deliveroo CEO Will Shu 20 votes per share, while all other shareholders are entitled to only one vote per share.
Last week, the company also announced a loss of £ 223.7 million in 2020. The losses in 2020 are significantly less than in 2019, when the London-based company recorded a loss of £ 317 million.
While the eight-year company is still in the red, revenues have risen to £ 4.1 billion in 2020 from £ 2.5 billion in 2019.
Deliveroo’s turnaround
Deliveroo went from a near-failure in 2020 amid a competitive assessment to Amazon’s minority investment, to an operating profit by the end of the year thanks to the coronavirus-induced lockdown in demand for online takeaway services.
Today Deliveroo claims to have more than 115,000 food vendors, 100,000 restaurants and millions of consumers in 12 countries. The submission shows that six million orders are placed on Deliveroo every month.
Amazon backed Deliveroo in May 2019, leading a $ 575 million funding round in exchange for a 16% stake in the company.
In July 2019, the UK antitrust regulator, the Competition and Markets Authority, argued that Deliveroo’s cash injection from Amazon could reduce competition by removing the possibility of the e-commerce giant re-entering the market, while Deliveroo ‘is no longer distinctive could be. “It froze the investment for nearly a year while the investigation was going on.
Much to the disappointment of rivals Just Eat and Domino’s Pizza, the deal was approved by the CMA in August after Deliveroo said it could go out of business without the capital.
As interest in the food delivery market continues to grow, UBS analysts have named seven stocks in the industry that are expected to rise 30%.
People ordering takeout more often – and spending more when they do – means the industry could reach a value of nearly $ 400 billion by 2024, the bank said. A Euromonitor estimate, meanwhile, said it could be worth $ 1 trillion in the next decade.
– Additional reporting by CNBC’s Ryan Browne.