De­liv­eroo given taste of life on pub­lic mar­kets as it mulls IPO

The Daily Telegraph - Business - - Technology Intelligen­ce - By Michael Cog­ley

BRI­TISH food de­liv­ery start-up De­liv­eroo has opened talks around a po­ten­tial ini­tial pub­lic of­fer­ing that could take place as early as next year, it has been re­ported.

The Ama­zon-backed firm has met with ad­vis­ers who could po­ten­tially man­age a flota­tion of the busi­ness in 2021, Bloomberg said, cit­ing un­named sources. A fi­nal de­ci­sion on a list­ing has yet to be made and De­liv­eroo may de­cide against any such move. A spokesman for De­liv­eroo said: “We don’t com­ment on spec­u­la­tion.”

Ama­zon’s in­vest­ment in the food de­liv­ery firm was ap­proved in Au­gust by the Com­pe­ti­tion and Mar­kets Author­ity. The US tech ti­tan pumped $575m (£450m) of cash into the busi­ness to help it stay afloat af­ter the mo­nop­oly reg­u­la­tor cleared the deal 15 months on from when it was first an­nounced. The CMA con­ducted a lengthy in­ves­ti­ga­tion and found that it wouldn’t sub­stan­tially de­crease com­pe­ti­tion in the mar­ket.

In the reg­u­la­tor’s fi­nal re­port, it also re­vealed that Ama­zon had orig­i­nally viewed the deal as a “po­ten­tial first step to­wards a full ac­qui­si­tion”.

The CMA in­sisted that any in­crease in Ama­zon’s stake­hold­ing in the firm would trig­ger another in­ves­ti­ga­tion.

As of Au­gust, De­liv­eroo had added an ex­tra 30,000 new restau­rants to its app this year as busi­nesses were forced to pivot into de­liv­er­ies dur­ing lock­down.

De­liv­eroo swung to a profit ear­lier this year just months af­ter it warned it could go bank­rupt. A splurge on take­aways dur­ing lock­down helped the com­pany to prof­itable months in May and June, ac­cord­ing to the CMA’s re­port. The com­pany had re­peat­edly strug­gled to turn a profit for years, and last Septem­ber said losses had deep­ened from £199m to £232m in 2018.

The busi­ness was val­ued at more than $2bn at its fundraise in 2017 but it pro­vided no up­date on its val­u­a­tion af­ter Ama­zon de­clared its in­ten­tion to in­vest. Ama­zon’s stipend brought the to­tal amount of cap­i­tal raised to over $1.5bn since it was founded in 2013.

In Au­gust, Waitrose struck a deal to sell gro­ceries on­line through De­liv­eroo af­ter the high-end su­per­mar­ket chain ended its deal with de­liv­ery site Ocado.

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