Deliveroo reveals that it lost $ 309 million in 2020 leading up to its London IPO

LONDON —Deliveroo, the Amazon-backed food delivery service, has revealed it recorded a loss of £ 223.7 million ($ 309 million) last year in plans to float on the London Stock Exchange published Monday.

Deliveroo’s losses are significantly less than in 2019, when the London-based company posted a loss of £ 317 million. While the eight-year company is still in the red, revenues have grown to £ 4.1 billion in 2020 from £ 2.5 billion in 2019.

A date for Deliveroo’s IPO has not yet been officially announced, but will likely be in the coming weeks. Goldman Sachs and JP Morgan Cazenove have been appointed as joint global coordinators.

According to reports, Deliveroo could be listed on the stock exchange at around $ 10 billion. It recently raised $ 180 million in new funding, giving it a valuation of $ 7 billion. In addition to Amazon, Deliveroo is also supported by Durable Capital Partners, Fidelity, T. Rowe Price, General Catalyst, Index Ventures and Accel.

In the company’s “Expected Intention To Float” file released Monday, Deliveroo CEO Will Shu said he “never intended to become a founder or CEO” and that he had “never read TechCrunch.”

“I’m not one of those Silicon Valley types with a million ideas,” the former Morgan Stanley analyst said in a letter accompanying the filing. “I had one idea. An idea born of personal frustration. An idea I was fanatically obsessed with: I wanted to have great food delivered by great London restaurants.”

Deliveroo went from near-failure in 2020 amid a competitive assessment, to Amazon’s minority investment, to operating profitability by the end of the year thanks to the coronavirus-induced blockage of demand for online takeaway services.

Today Deliveroo claims to have more than 115,000 food vendors and 100,000 restaurants and millions of consumers in 12 countries. The submission shows that six million orders are placed on Deliveroo every month.

But Deliveroo is “still getting started,” said Shu.

“Our ambitions have grown as we really begin to understand and implement the opportunities that lie ahead in online nutrition,” he said.

The filing includes details on Deliveroo’s dual-class share structure, giving Shu 20 votes per share, while all other shareholders are entitled to only one vote per share.

This structure, which will give Shu more voting rights and more control over the management of the company, will be in effect for three years.

It comes after a government-backed review calling for reforms to the London listing regime, including the ability to list dual-class stocks developed by Google and Facebook.

Deliveroo plans to reserve £ 50 million in shares for customers across the UK.

“We are proud to enable our clients to participate in a future exchange and have the opportunity to buy shares,” said Shu. “Your loyalty and habit have helped build our business. I want you to have the opportunity to share in our future.”

Deliveroo said it will use the proceeds from the IPO to improve its app, expand its delivery-only kitchens “Editions” and take a deeper look at the on-demand grocery delivery currently offered by supermarkets such as Waitrose, Co. -on, London, Aldi and Carrefour.

Deliveroo also plans to donate £ 16 million to its riders through a new “Thank You Fund”, with a handful of loyal riders paying out £ 10,000. Others receive £ 1,000, £ 500, £ 200 or £ 100, depending on how many orders they have delivered. Average payout is £ 440.

Over the years, some of the company’s riders have complained about how much they get paid by Deliveroo and have campaigned to be classified as workers rather than contractors, making them eligible for things like sick pay and vacation.

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 could “hold up” It froze the investment for nearly a year while the research was doing.

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.

– Additional reporting by CNBC’s Ryan Browne.