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