Amazon-backed food delivery firm Deliveroo is now worth $7 billion after a $180 million pre-IPO funding round
Will Shu, CEO of Deliveroo, at President Macron’s technology summit in France in 2018. Shu said he was the only one who didn’t show up in a suit.
LUDOVIC MARIN / Getty
- Grocery shipping company Deliveroo is now valued at $ 7 billion after raising $ 180 million in new funds.
- The Amazon-supported company is preparing to go public in the course of 2021.
- Insiders reported this week that UK-based Deliveroo could be worth up to $ 13.6 billion if it goes public, with a source setting April for an IPO.
- You can find more stories on the Business Insider homepage.
Amazon-backed grocery shipping company Deliveroo is now worth over $ 7 billion after raising $ 180 million in fresh capital.
The new round was led by two of Deliveroo’s existing supporters, Durable Capital Partners and Fidelity. Both are investors who put money into both public and private companies.
UK-based Deliveroo, which has seen a boom in customs due to national lockdowns, also confirmed plans for a stock market debut on Sunday. Although the company is led by US CEO Will Shu, it is expected to be listed on the London Stock Exchange.
Insider reported earlier this week that an IPO could value Deliveroo at £ 10 billion ($ 13.6 billion) and that the company may be considering an IPO in April.
That Durable Capital and Fidelity are increasing their stakes now signals confidence in the expected share price and future growth of Deliveroo. As an industry source put it, “Why shop at $ 13 billion when you can shop at $ 7 billion now?”
The gambit worked before.
Both Durable Capital and Fidelity invested around six months prior to going public in December in Deliveroo’s U.S. equivalent, DoorDash, valued at roughly $ 16 billion. When it went public, DoorDash passed a valuation of $ 32 billion and its market capitalization is now $ 60 billion.
Deliveroo is based in the UK and competes with Uber Eats in Europe and parts of Asia. It does not currently operate in the United States. It offers deliveries of groceries, alcohol and groceries on demand via an app and relies on a network of cyclists and motorcyclists to deliver items to customers.
A courier for the delivery service Deliveroo rides a bicycle in the center of Brussels
It was founded in 2013 by Shu, a former investment banker, and Greg Orlowski. Orlowski left the company in 2016 and Shu remains the company’s CEO.
An IPO would limit a roller coaster year for the company.
As is typical of high-growth venture capital-backed companies, Deliveroo has so far been mostly losing money. When the UK, its main market, closed in the spring and restaurants closed, the company warned it could collapse.
The situation was exacerbated by the UK competition authority, which on competition grounds denied Deliveroo access to a large tranche of $ 575 million in funding led by Amazon in 2019. Deliveroo laid off around 300 employees in an effort to cut costs.
The regulator finally approved the funding in April and concluded that Amazon’s involvement posed no antitrust threat. Deliveroo’s business also began to improve as restaurants turned to delivery apps for revenue and consumers increased their take-away orders, bored of home-cooked food.
After initially warning of the collapse, Deliveroo said towards the end of the year it had become “operationally profitable” in 2020.
The latest publicly available financial data showed 2019 revenue growth of $ 1 billion, gross profit margin of around 24%, and year-over-year higher pre-tax losses of $ 393 million.