(qlmbusinessnews.com via bbc.co.uk – – Mon, 22nd March 2021) London, Uk – –
Deliveroo is seeking a valuation of between £7.6bn and £8.8bn when it lists its shares on the London stock market.
The takeaway food delivery platform has said it plans to sell its shares at a price of between 390p and 460p, in what is set to be the biggest UK share listing in more than seven years.
It also said on Monday the total value of orders in January and February had more than doubled from last year.
Founder Will Shu said there were “huge” opportunities ahead.
Demand for takeaway meals has soared during the coronavirus pandemic, after lockdown measures were first implemented a year ago and restaurants have been forced to close.
Restrictions on hospitality businesses in England are currently set to start to ease on 12 April at the earliest.
Deliveroo – which has yet to announce a profit – said it would use the money raised to invest in the business.
The company was founded in London in 2013, and is active in more than 200 towns and cities across the UK.
It operates internationally in 12 countries, in mainland Europe, Asia, Australia and the Middle East.
Deliveroo said there were “enormous” market opportunities for expansion. “The way we think about it is simple: there are 21 meal occasions in a week – breakfast, lunch, and dinner – seven days a week. Right now, less than one of those 21 transactions takes place online. We are working to change that.”
Deliveroo will sell around £1bn of new shares, and current shareholders will use the opportunity to sell some of their stake.
On Sunday, Mr Shu told Sky News he would cash-in part of his 6.2% stake in the business, which could be worth £550m.
Customers who have placed at least one order with Deliveroo will have a chance to buy shares in the business, with what the company calls “loyal” customers being given priority.
Deliveroo is also planning to reward its busiest riders with bonuses of up to £10,000.
Riders who have delivered the most orders will share in a £16m fund, the company has said.
Workers' rights and competition
Deliveroo drivers in the UK have been at the forefront of the debate about new ways of working in the “gig” economy. Some drivers have taken industrial and legal action to improve their pay and conditions.
A recent court decision confirming worker status in the UK for gig economy giant Uber put down a new marker for workers' rights in this evolving sector. The Court of Appeal ruled that Uber's drivers should receive holiday pay, pension contributions and the minimum wage.
Uber last week said it would introduce these payments.
Susannah Streeter, from stockbrokers Hargreaves Lansdown, said the employment status of its drivers along with fierce competition among meal delivery firms were two potential drags on the company's prospects.
“Deliveroo competes with Uber Eats, Just Eat and a host of others. Just Eat has already announced its intention to ramp up operations in the UK. Until now it's been focused on just offering the delivery platform but now it will be scaling up its delivery fleet of riders over the coming year.
“Just Eat takeaway has also pledged to stop using the gig economy model and offer UK workers hourly wages, sick pay and pension contributions. This is in stark contrast to Deliveroo which has so far seen off challenges in the courts to its self-employment model… it's clear the challenge to Deliveroo's contractor model is likely to continue.”