Deliveroo aims for £8.8bn valuation in London flotation | Deliveroo

Source: www.theguardian.com

Deliveroo expects its flotation on the London stock market to value the company at up to £8.8bn as it continues to benefit from the food home delivery boom during the latest national Covid-19 lockdowns.

The meal delivery service, which is backed by Amazon, said in a trading update that the total value of transactions processed on its platform surged by 130% year on year in January in the UK and Ireland, and 112% in other markets. Overall growth across all markets stands at 121% for the period.

Deliveroo also announced that it had priced its initial public offering at between £3.90 and £4.60 a share. The price range values the business, which will be the largest share listing in London in seven years, at between £7.6bn and £8.8bn.

“We are proud to be listing in London, the city where Deliveroo started,” said Will Shu, the founder and chief executive of Deliveroo, who owns a 6.2% stake in the company.

“Becoming a public company will enable us to continue to invest in innovation, developing new tech tools to support restaurants and grocers, providing riders with more work and extending choice for consumers, bringing them the food they love from more restaurants than ever before. This will help us in our mission to become the definitive food company.”

The company, which plans to raise £1bn from its stock market flotation, announced its intention to list on the London stock market this month.

Deliveroo’s IPO plans were confirmed only days after the UK government committed to changing rules that would allow company founders, such as Shu, to keep control of their businesses despite selling shares to investors on the stock market.

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The company is expected to take advantage of a dual-class share structure – split into class A and class B shares – which will last for three years and temporarily strip investors of ownership rights.

Last week it emerged that gig economy companies, including Uber and Deliveroo, have faced at least 40 major legal challenges around the world as delivery drivers and riders try to improve their employment rights.

The cases have been brought by gig economy workers seeking access to basic rights, such as minimum wages and sick pay.

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