Deliveroo, an online meal delivery platform is planning a stock listing in London. The company has opened up its IPO to retail investors as well as customers, making shares worth £50 million available to its customers that register their interest through the Deliveroo app. The decision has been praised as a positive step in the right direction to provide fairer access to IPO for retail investors.
While the initial public offering has been opened beyond sophisticated investors and institutions, investors still will be needed to download the Deliveroo application and if there is a big demand for shares, the company said it will be giving priority to its more regular customers. Every customer can apply for up to shares worth £1,000.
More on the IPO of UK-based Deliveroo
A date for the IPO of Deliveroo hasn’t been officially declared yet. However, it is likely to happen in the next few weeks. JP Morgan Cazenove and Goldman Sachs have been appointed by Deliveroo as the joint global coordinators.
In January 2021, Deliveroo raised about $180 million (approximately £130 million) in a fresh round of funding at a valuation of $7 billion (£5 billion). The investment round included support from existing shareholders like Amazon, Fidelity, Durable Capital Partners, T. Rowe Price, Index Ventures, General Catalyst and Accel.
Rishi Sunak, the Chancellor of the Exchequer said that the United Kingdom is one of the greatest places in the world to commence, grow and list a company, and they’re determined to continuously build on this reputation now they’ve left the European Union. This is why the UK is looking at reforms to encourage more dynamic, high-growth businesses to list here.
Chief Executive Officer of Deliveroo, Will Shu said his company was born in London, this is where he founded Deliveroo and delivered the company’s first order. London is the best place to live, work, do business as well as eat. This is why he’s so proud and excited about a potential listing in the UK, says Shu.
Though Deliveroo is going public, it’s still loss-making
In all the fanfare surrounding the IPO (Initial Public Offering) of Deliveroo and the hike in its demand it saw during the pandemic, it still remains a loss making company. In the year 2020, the company reported an underlying adjusted EBITDA loss of about £9.6 million and an underlying loss of £223.7 million for the same year, as compared to 2019’s underlying adjusted EBITDA of £231.6 million along with an underlying loss for the year of about £317.3 million.
In this period, online meal delivery platform Deliveroo grew its GTV (Gross Transaction Value, total amount of transactions it processed on its platform) by 64.3% from £2.5 billion to £4.1 billion. Its underlying gross profit soared by 89.5% (from £188.7 million to £357.5 million), raising the company’s underlying gross profit as a percentage of GTV (from 7.6% to 8.8%).
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