A Deliveroo courier travels along Regent Street delivering takeaway food in central London during the Covid-19 Tier 4 restrictions.
Pietro Recchia | SOPA pictures | LightRocket via Getty Images
LONDON – Food delivery company Deliveroo is aiming 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 supported by investors such as Durable Capital Partners, Fidelity, T. Rowe Price, General Catalyst, Index Ventures and Accel.
Deliveroo also plans to offer its customers £ 50m worth of shares.
Some early Deliveroo supporters are reportedly seeing a 60,000% return on their investment a report sifted from the Tech Media website on Monday.
Deliveroo was valued at $ 7 billion in July when an additional $ 180 million was raised from investors. According to reports, it could be worth around $ 10 billion after the IPO.
Goldman Sachs and JP Morgan Cazenove have been named joint global coordinators for the IPO. A date for the IPO has not yet been officially announced, but is expected to be in the next few weeks.
A filing last week gave details of Deliveroo’s dual-tier share structure, where Deliveroo’s CEO Will Shu gets 20 votes per share while all other shareholders get just one vote per share.
Last week the company also announced it had posted a loss of £ 223.7m in 2020. Losses are significantly less in 2020 than they were in 2019, when the London-based company posted a loss of £ 317m.
While the eight-year-old company is still in the red, sales rose to £ 4.1 billion in 2020, from £ 2.5 billion in 2019.
Deliveroo moved from a near-failed result in 2020 as part of a competitive review of Amazon’s minority stake to an operating result towards the end of the year as demand for online take-out services increased due to coronavirus lockdowns due to lockdowns.
Today Deliveroo claims to have over 115,000 grocers, 100,000 restaurants and millions of consumers in 12 countries. The filing shows that Deliveroo receives six million orders every month.
Amazon backed Deliveroo in May 2019 and initiated a $ 575 million financing round in exchange for a 16% stake in the company.
In July 2019, the UK’s Competition and Markets Authority argued that Deliveroo’s cash injection from Amazon could reduce competition by eliminating the e-commerce giant’s possibility of re-entering the market while Deliveroo could “stop” significantly. “It froze the investment for almost a year while it investigated.
To the disappointment of rivals Just Eat and Domino’s Pizza, the deal was approved by the CMA in August after Deliveroo announced that the deal could be shut down without the capital.
As interest in the grocery delivery market continues to grow, UBS analysts have cited it seven stocks in the sector expected to rise up to 30%.
People who order more take-out – and spend more – mean the sector could reach nearly $ 400 billion in value by 2024, the bank said. According to a Euromonitor estimate, it could be worth $ 1 trillion over the next ten years.
– Additional coverage from CNBC’s Ryan Browne.