Delivery Hero aims to raise R13.4bn through listing
DELIVERY Hero is aiming to raise about ß927-million (R13.4-billion) through a stock market listing that could value the online takeaway food delivery group at up to ß4.4-billion (R63.7-billion).
Some investors consider this a hefty price tag given that the Berlin-based company has yet to turn a profit and faces fierce competition from regional players like Britain’s Just Eat and the Netherlands’ Takeaway.com, as well as global groups like Amazon and Uber.
Delivery Hero will become the fourth major online food delivery firm to go public in the past few years globally, following Grub Hub, Just Eat and Takeaway.com, which have all seen their shares soar since listing.
The sale will provide a much-needed boost to German e-commerce investor Rocket Internet, which holds a 35% stake in Delivery Hero, making it the biggest holding in its portfolio.
The initial public offering in Frankfurt, which includes the sale of new shares, is part of Delivery Hero’s plans to grow and fend off the threat from Uber and Amazon. Major European investors are expected to jump in and buy shares in the IPO because of the online food delivery market’s growth potential.
But there are also concerns about increasing competition.
“I haven’t been inspired to look at it,” Steve Sherman, who manages European equities at BNP Paribas Investment Partners, said.
“Our challenge with the delivery aggregation companies has been the limited barriers to competition, which make us worry that they won’t make much money even if the demand is good,” he said.
“Perhaps Delivery Hero will be different.”
Delivery Hero has invested heavily to expand globally and is now present in 42 markets in Europe, Middle East, North Africa, Latin America and Asia Pacific.
It has access to a total delivery market worth ß72-billion (R1.04trillion), a source familiar with the matter said.
This compares with ß28-billion (R405.7-billion) for smaller British rival Just Eat, and ß13-billion (R188,2-billion) for Dutch Takeaway.com.