Deliveroo: spring chicken comes to market
Top marks to Deliveroo for a timely arrival, said Alex Brummer in the Daily Mail. The restaurant delivery group announced plans to float in the UK “just hours” after Lord Hill served up his recipe for City reforms – becoming an instant exemplum of the whizzy tech-based IPO Hill hopes to put on the menu in London. Doubtless Deliveroo founder Will Shu was equally “anxious to capture the moment”. The pandemic “has been a boon to online hospitality”, and similar listings in New York, such as DoorDash, “have attracted generous premiums”. At its last fundraising in January, Deliveroo was valued at £5bn; the latest price projections suggest a spring bounce to £7bn.
The key to delivering Deliveroo to London was
“an easing of listing rules” relating to dual-class shares, meaning that founders like Shu “can continue to innovate and expand without fear of premature takeover”, said Brummer.
That’s one way of putting it, said Alistair Osborne in The Times. Shu’s special “B” shares also shield him “from the sack for three years”. Still, at least this float – scheduled for the end of March or beginning of April – features a retail offer (via PrimaryBid) allowing ordinary investors an early bite of the company.
Deliveroo scores well “for inviting customers to buy a few shares”, agreed Nils Pratley in The Guardian. But its figures are at odds with management’s claim of “best-in-class unit economics”. Losing £223.7m in 2020, despite a surge in lockdown business, is hardly the stuff of “A grades”. A punt on Shu’s baby “is an invitation to sit back and think about decades of growth ahead” – at highly unguessable margins. “In the short term, one suspects Deliveroo will easily find buyers in a London IPO market that has been starved of buzzy names. It’s not for everyone, though.”