Deliveroo *Official* (LSE: ROO)

[Shion]

Deliveroo to kick off London IPO in March: Report

https://www.straitstimes.com/busine...iveroo-to-kick-off-london-ipo-in-march-report

LONDON (BLOOMBERG) - UK food-delivery start-up Deliveroo is due to lay out plans for an initial public offering in London on March 8, Sky News reported on Monday (Feb 15), without elaborating on where it got the information.

The timetable remains subject to change, with the March 8 date not yet definitive, Sky reported, adding that Deliveroo declined to comment for its story. The company did not immediately respond to requests for comment from Bloomberg News.

After initially struggling at the start of lockdowns, Amazon-backed Deliveroo got a boost as the year went on while customers avoided supermarkets and ordered takeout meals and groceries. Bloomberg News reported in September that the company planned to tap public markets.

Deliveroo's listing comes amid a surge in IPO activity in London, Europe's busiest venue this year.

Deals include British bootmaker Dr Martens Plc, which soared in its debut last month after a £1.3-billion offering, while virtual greeting-card and gifting firm Moonpig Group Plc listed two weeks ago.

Across Europe, beneficiaries of a pandemic-fuelled online shopping boom are tapping public markets.

Poland's InPost SA, which operates automated parcel lockers for deliveries, surged in its Amsterdam debut late January. Digital used-car dealer Auto1 Group SE raised €1.8 billion in Frankfurt this month.

Deliveroo said in January it had raised more than US$180 million in its latest funding round, valuing it at more than US$7 billion. That could put the IPO in the league of the biggest share sales in Europe this year.

Founded in 2013, Deliveroo has 140,000 restaurant partners and 110,000 delivery riders in the UK and overseas, while its app has 9.6 million downloads, according to its website.

In December, the company said it had been profitable "at the operating level" for more than six months in 2020, while posting operating revenue of £771.8 million in 2019, up 62 per cent on the previous year.

JPMorgan Chase & Co and Goldman Sachs Group will lead the IPO, according to Sky.

 

[Shion]

Deliveroo targets $10bn valuation in London IPO

Deliveroo targets $10bn valuation in London IPO

Food delivery group’s plan follows review of UK listing rules and is expected to be one of City’s largest in 2021

https://www.ft.com/content/f8108b89-419f-40e8-97c9-ce2c15b905e9



Deliveroo is targeting a price tag of as much as $10bn in its initial public offering, according to people briefed on discussions at the food delivery group, giving London its most valuable new listing for several years.

If the London-based company completes the float at the top of its target range, giving it a market capitalisation of more than £7bn, Deliveroo would be worth more than Sage, one of the few FTSE 100 tech companies, and The Hut Group, the ecommerce group that did the largest UK IPO for five years in 2020.

In a private financing in January Deliveroo was valued at about $7bn, a figure that had already doubled since an Amazon-led investment in 2019.

The pandemic supercharged demand for food delivery services as lockdowns closed restaurants, driving DoorDash — the US food delivery service that Deliveroo closely resembles — to a $60bn valuation at December’s IPO in New York. Just Eat Takeaway.com, Deliveroo’s closest European rival, is currently valued at £10.1bn on the FTSE 100.

However, people close to Deliveroo warned that the stock market volatility of recent days could yet reduce the price at which its shares are offered to investors, a process expected to begin in the coming weeks. “There is a lot of movement, it’s very early days,” said one.

A Deliveroo spokesperson declined to comment on its prospective valuation.

Deliveroo said earlier on Thursday that it had chosen London for its highly anticipated IPO after Rishi Sunak, the UK chancellor, endorsed an overhaul of listing rules to allow founders to retain more control after going public.

The decision hands the City a much-needed win over New York and Amsterdam at a time of feverish activity in new tech listings.

“Deliveroo is proud to be a British company, and the selection of London as its home for any future listing reflects Deliveroo’s continued commitment to the UK,” said Claudia Arney, Deliveroo’s chair.

London has long been seen as the obvious venue for Deliveroo to list given the food delivery service was founded there in 2013 and the UK is its largest market.

But many European internet companies are looking to New York, where US investors have rewarded new tech listings such as DoorDash and Airbnb with higher valuations than some entrepreneurs feel they could get in London. In the aftermath of Brexit, Amsterdam has also lured high-growth IPOs including InPost, which operates a network of parcel lockers for online retailers.

Deliveroo’s decision follows the publication on Wednesday of a review by Lord Jonathan Hill, former EU financial services commissioner, which recommended a wide range of reforms to loosen listing rules in the UK.

The new listing rules are unlikely to come into force before Deliveroo has completed its IPO, for which initial paperwork is expected as soon as next week. But the new rules will allow the company to eventually graduate to the London Stock Exchange’s premium listings segment without Will Shu, Deliveroo’s US-born co-founder and chief executive, having to sacrifice control.

Among Hill’s recommendations were allowing companies on the London Stock Exchange’s “premium” segment to use dual-class share structures, which let founders hold on to extra voting rights after an IPO.

The dual-class arrangement is popular in Silicon Valley, where Facebook chief Mark Zuckerberg and Google’s founders Larry Page and Sergey Brin benefit from such schemes.

Sunak endorsed the plan during Wednesday’s Budget. The move was designed to attract fast-growing tech companies such as Deliveroo, though some London fund managers fear the change puts shareholder protection at risk.

Deliveroo said in a statement on Thursday morning that its dual-class structure would be “closely in line” with the Hill review’s recommendations and be limited to three years.

“Alongside the dual-class share structure, Deliveroo intends to have a strong commitment to corporate governance standards including a majority independent board of directors as well as upholding diversity standards,” the company said.

Companies with dual-class structures can already trade on the LSE’s standard market. Once the new rules are in place, Deliveroo would be able to move up to a premium listing. A person close to the company said that the Hill review was also likely to attract more tech companies to London, making it more attractive as a listing venue overall.

Shu said he was “proud and excited” to list in London. Sunak hailed his decision as “fantastic”, calling Deliveroo a “true British tech success story”. “It is great news that the next stage of their growth will be on the public markets in the UK,” the chancellor said in a statement.

 

[Shion]

Deliveroo riders to get cash bonus if potential IPO goes through

Deliveroo riders to get cash bonus if potential IPO goes through

https://www.businesstimes.com.sg/ga...-get-cash-bonus-if-potential-ipo-goes-through

DELIVEROO riders in Singapore could receive payments ranging from S$370 to as much as S$18,500 if the food delivery startup's planned listing in London goes through.

This is part of a Thank You Fund to reward riders who have delivered the most orders, Deliveroo announced on Sunday. The fund, which would launch on the day of an initial public offering (IPO), will be available to active riders in all 12 markets in which Deliveroo operates.

The payments will be calculated based on the number of orders completed by each eligible rider, with the largest payments being made to those who have completed the highest number of orders in each market.

The payments start from S$370, for riders who have worked with Deliveroo for at least one year and completed 2,000 orders, and increase to S$925, S$1,850 and S$18,500.

Deliveroo said that the percentage of riders eligible for each of the different awards will be consistent across all markets. It estimates that over 36,000 riders globally will each receive cash payments, with each receiving S$815 on average.

In all, the payments are expected to amount to £16 million (S$29.7 million).

Said Will Shu, founder and chief executive of Deliveroo: "Riders are at the heart of our business, and we want to reward their efforts that have helped Deliveroo become what it is today. Their commitment to great service has enabled us to grow and offer the best food delivery experience in the world."

According to media reports this week, Deliveroo is seeking a listing in London, with a potential valuation of as much as US$10 billion, the Financial Times reported.

As at January, Deliveroo was valued at about US$7 billion, following a recent funding round in which it raised more than US$180 million.

 

[Shion]

Deliveroo to offer US$69m of stock to customers, establish US$22m fund for riders

https://www.channelnewsasia.com/new...tomers-thank-you-fund-payment-riders-14352870

LONDON: Deliveroo said shares worth £50 million (US$69 million) would be earmarked for customers in its upcoming flotation, with the offer branded "Great food with a side of shares".

The Amazon-backed food delivery firm announced plans on Thursday (Mar 4) to list in London, with a potential value of US$7 billion making it the biggest market debut in Britain for three years.

Founder and chief executive Will Shu said Deliveroo's customers had supported the firm's growth and he wanted to give them the chance to share in the next stage of its journey.

"Far too often, normal people are locked out of IPOs, and the only participants are the institutional investors," he said on Sunday.

"I wanted to give as many customers as possible the chance to become shareholders, which is why we're making £50 million of shares available to them, alongside our restaurant partners and riders."

Deliveroo said any customer who had placed an order would be able to register their interest via the company's app from Monday.

Each would be able to apply for up to £1,000 of shares, it said, adding that loyal customers would be prioritised if the offer were oversubscribed.

Russ Mould, investment director at online platform AJ Bell, said a year of lockdowns had fuelled demand for companies like Deliveroo and there was an expectation that habits formed during the pandemic would remain long into the recovery.

"All this suggests there is likely to be a bun fight for the £50 million worth of customer shares in Deliveroo at the IPO offer," he said.

THANK YOU FUND

Deliveroo said it would also recognise the role played by its delivery riders in its success with a £16 million (US$22 million) reward programme to be launched on the day of listing.

The Thank You Fund will be available to active riders in Deliveroo's 12 markets, with riders eligible based on the number of orders they have delivered.

"There will be payments of S$18,500, S$1,850, S$925, with all riders who have worked with Deliveroo for at least one year and completed 2,000 orders receiving S$370," said the company in a press release.

Payments will be calculated by reference to the number of orders completed, with the largest payments going to riders who have completed the highest number of orders in each market.

The percentage of riders eligible for each award will be consistent across all markets, it added.

The average payment for each eligible rider will be S$815, while hundreds of active riders globally are set to receive the largest payment of S$18,500, said Deliveroo.

The company expects more than one-quarter of Deliveroo's global rider fleet to benefit from the scheme, with more than 36,000 riders globally receiving cash payments.

"Riders are at the heart of our business, and we want to reward their efforts that have helped Deliveroo become what it is today," said Shu.

"Over the last year riders have helped us do so much more than just deliver great food, having supported businesses and enabled vulnerable people or those self-isolating to stay safe indoors throughout a global pandemic. We're pleased to be able to say thank you."

 

[Shion]

Commentary: Deliveroo’s IPO - like changing tires while driving

Deliveroo seemed to have defied fundamentals in 2020, which is good news ahead of its London stock market listing, but its prospects do not look good, says IMD Business School’s Howard Yu.

https://www.channelnewsasia.com/new...po-like-changing-tires-while-driving-14383102

 

[Shion]

Deliveroo IPO set at 1.77 bil GBP, London’s biggest in 2021

Deliveroo IPO set at 1.77 bil GBP, London’s biggest in 2021

https://www.theedgesingapore.com/news/ipo/deliveroo-ipo-set-177-bil-gbp-london’s-biggest-2021

Food-delivery startup Deliveroo Holdings Plc has started taking investor orders in a share sale of as much as 1.77 billion GBP ($3.29 billion), marking the largest initial public offering in the UK since September

Deliveroo is selling shares at 3.90 GBP to 4.60 GBP apiece, according to a statement Monday, valuing the company at 7.6 billion GBP to 8.8 billion GBP.

The offering is the biggest float on the London Stock Exchange since THG Plc’s 1.88 billion-pound offering in September, according to data compiled by Bloomberg.

The company plans to sell as many as 384.6 million shares, an amount that could rise by as much as 10% if there’s enough demand. Besides the 1 billion GBP of new shares the company aims to sell, existing shareholders will also sell stock in the IPO, the company said. The company plans to invest its proceeds to fuel growth.

Deliveroo is coming to the market at a time coronavirus restrictions have caused soaring demand for food delivery. Gross transaction value -- the total value of purchases on its platform -- rose 121% in January and February versus the same period last year, the company said Monday, after a 64% increase in 2020.

“Bringing the food category online represents an enormous market opportunity,” it said, adding that less than one of 21 meals a week including breakfast lunch and dinner takes place online now.

Its shareholders include Amazon.com Inc., which holds a 16% stake, venture capital firms DST Global and Index Ventures, who own about 10% each, and US mutual-fund company T. Rowe Price Group Inc. with a 8.1% interest.

Deliveroo is listing with two classes of shares, which will give Chief Executive Officer Will Shu outsized voting rights for three years. The offering comes after a government-backed report this month made a slew of recommendations to reform UK listing rules, including allowing such governance structures on the premium segment of the LSE, but it could be months before these are implemented.

The proposals are part of London’s attempts to retain its clout as a major financial centre in a post-Brexit world and attract fast-growth technology firms to its stock exchange. About 4.8 billion pounds has been raised this year in the City through IPOs, according to data compiled by Bloomberg.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. are joint global coordinators on the offering, while Bank of America Corp., Citigroup Inc., Jefferies and Numis Securities Ltd. are joint bookrunners.

 

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Deliveroo narrows price range ahead of London market debut​

https://www.channelnewsasia.com/new...e-range-ahead-of-london-market-debut-14517728

LONDON: Food delivery group Deliveroo has narrowed the price range on its initial public offering, ensuring its order books were fully covered for what will be London's biggest IPO in a decade.

The London-based company, founded by boss William Shu in 2013, could be valued at up to £7.85 billion (US$10.85 billion) in its stock market debut on March 31.

The listing is set to be London's biggest IPO since Glencore in May 2011 and also the biggest tech float on the London Stock Exchange, dwarfing The Hut Group last year.

Deliveroo narrowed its price range on Monday to between £3.90 and £4.10 per share, indicating a valuation of between £7.6 billion and £7.85 billion, excluding shares offered as part of an over-allotment issue.

The company opted against pricing the deal at the top of an original price range of between £3.90 and £4.60 - which would have given it a market value of up to £8.8 billion - citing market volatility.

Banks working on the deal said on Monday that order books were covered throughout the price range, showing demand would "exceed the full deal size."

"Deliveroo has received very significant demand from institutions across the globe. The deal is covered multiple times throughout the range, led by three highly respected anchor investors," a company spokesperson confirmed.

"Given volatile global market conditions for IPOs, Deliveroo is choosing to price responsibly within the initial range and at an entry point that maximises long-term value for our new institutional and retail investors."

A source familiar with the listing said the company had to take into account the performance of some recent IPO deals, such as US cloud computing firm DigitalOcean and British online reviews platform Trustpilot, which were both trading below their IPO price.

"By narrowing its target range, Deliveroo is trying to make sure it doesn't hit a bump in the road as it begins its journey on the stock market," said Hargreaves Lansdown's senior investment and markets analyst, Susannah Streeter.

Deliveroo has benefited from lockdown demand for takeaway food during the COVID-19 crisis when restaurants across Europe were forced to shut down.

Its revenues have soared and its so-called gross transaction value - a measure of the total value of orders received - jumped 64.3 per cent in 2020 to £4.1 billion.

'MANAGING EXPECTATIONS'

Deliveroo's order book has so far attracted strong interest from US investors which are familiar with the dual-class share structures and the dynamics of tech listings, the source close to the IPO said.

Yet, some British institutional investors are not comfortable with the company's decision not to pursue a premium listing. This will allow its CEO Shu to retain enhanced shareholder rights but means the company will not join the FTSE indices.

UK fund manager Legal & General Investment Management said last week it was unlikely to participate in the IPO.

"It may be blaming volatile market conditions for the move, but the rejection of the IPO by a slew of institutional investors is likely to also have caused some concern at the delivery company," Hargreaves Lansdown's Streeter said.

"It's likely initial orders for the IPO have come in nearer the bottom of the target range, and by setting its sights nearer those prices, it is managing expectations on its ride to listed status," she added.

JPMorgan and Goldman Sachs are acting as joint global coordinators on the deal while Bank of America, Citigroup, Jefferies and Numis are the joint bookrunners.

 

[发哨子2020]

Thank God it wasn’t listed here .
Deliveroo dives 30per cent as debut of the decade turns torrid
https://www.channelnewsasia.com/news/business/deliveroo-shares-plunge-30-in-london-debut-14530706

 

[Dr.Vijay]

Thread title updated.

 

[Shion]

Deliveroo IPO debacle leaves small investors with bad taste​

https://www.channelnewsasia.com/new...eaves-small-investors-with-bad-taste-14541062

LONDON: London-based amateur trader Amy Lee wasn't sure whether to buy shares in Deliveroo's stock market debut but decided eventually to take the leap, swayed by ad campaigns on the food delivery company's app.

"I took a gamble," she said. "It was my own fault, but I think I was swayed by the thought 'surely Deliveroo wouldn't advertise a bad product to their customers through their app. That would be stupid right?'"

Lee and others like her who were allocated shares worth a total of £50 million (US$69 million) are nursing paper losses after Deliveroo shares plunged as much as 30 per cent on their London Stock Exchange debut on Wednesday.

The fall, slicing £2 billion off initial valuations, is a blow to Britain's ambitions of attracting fast-growing tech companies to London.

It may also raise questions about retail traders' appetite for future investments, especially in initial public offerings (IPO) - this was the first time individuals in Britain were given a chance to get in on the first-day action.

Deliveroo had dubbed its campaign: "Great food with a side of shares".

But things went wrong even before the IPO. Several asset managers shunned it, citing concerns about gig-economy working conditions and Deliveroo's corporate governance.

Many amateurs discussing the matter on online Reddit forums cited similar reasons for steering clear.

Since buying £250 worth of stock, Lee has done more research and now says she is "gutted" to have given her money to "what seems to be another greedy tech company lacking social value or drive to do things differently".

But she can't sell until Apr 7, because of rules around "conditional trading" - a practice customary in London IPOs until the shares "settle", usually lasting a week.

A spokesman for PrimaryBid, a platform that allows retail investors to participate in major share sales, said this had been made clear to customers at every stage.

One Londoner who bought £295 of Deliveroo stock said the company's sales team seemed to have "bent over backwards" to turn diners into investors.

"Every time you placed a Deliveroo order they flashed a sign. They let me invest even without a brokerage account. They said we will open up a Lloyds (bank) account for you and do it for you, (for) a one-off fee of £5. They made it super helpful," he said, requesting anonymity.

Asked for comment, a Deliveroo spokesperson said: "Although the trading started lower than we would have liked, we are just starting life as a public company and we are confident that our winning proposition will deliver long term value for all shareholders."

"We thank each of our customers who took part in our customer offer and will work tirelessly for them each and every day."

Deliveroo shares have recovered slightly from Wednesday's lows, but their first day performance was the worst on record for a London IPO worth more than £1 billion, markets platform Dealogic said.

DEMOCRACY

Retail investors will likely be wooed by other market debutants as many trading companies, including the Robinhood app, say they want to "democratise" IPOs by not restricting allocations only to institutional investors.

PrimaryBid is in talks with other listings candidates, a source familiar with those discussions has told Reuters.

The company collects orders from individuals and then makes a collective bid on deals. Bankers say it is becoming an influential participant, getting involved in fundraising deals from tech firm Ocado and caterer Compass Group.

PrimaryBid estimates retail ownership is about 15 per cent of the UK stock market, as many people stuck at home in the pandemic with spare cash have taken to dabbling in equities on trading apps.

While UK amateur participation has risen from 10 per cent in 2009, it lags US levels of 25-30 per cent.

Still, some - such as Sam Elliot, a London-based primatologist - confess to having become "obsessed" with stock markets, following the frenzy around US video game retailer GameStop in January.

He invested 250 pounds in Deliveroo and, while also "gutted" by the shares' fall, intends to hold them for the long term.

Another investor - and former Deliveroo courier - Rui Lopes also committed 250 pounds, a sum he said he could afford to lose.

"The price drop did get me slightly apprehensive at first ... but you know what they say. Buy the dip!"

And even without the first-day "pop" or surge last year's US deals enjoyed, investors could well end up in the money - after all, Facebook, Uber and Peloton were also IPO flops initially.

 

[yang_nastyman]

sh!t company

many other good companies to spend your money on

 

[发哨子2020]

Three hedge funds bet against Deliveroo’s stock with short positions

 

[Shion]

Commentary: Deliveroo’s IPO is a lesson to not underestimate investors

The Deliveroo IPO debacle should not be seen as a barometer of future stock market listings for a few reasons, says The Smart Investor's David Kuo.

https://www.channelnewsasia.com/new...ice-valuation-profits-loss-spac-grab-14624962
SINGAPORE: The initial public offering (IPO) of Deliveroo in early April this year was meant to be the start of something big for the UK.

Ahead of the stock-market listing, British finance minister, Rishi Sunak, hailed the highly anticipated listing as a true British tech success story that could clear the way for more IPOs from technology companies.

It turned out to be anything but a success story for many private investors. Some have said Deliveroo’s IPO was nothing short of an unmitigated disaster. They certainly have reasons to be disappointed.

After all, investment bankers Goldman Sachs and JP Morgan had priced the shares in the food-delivery app at £3.90 (US$5.36) a piece, which valued the company at £7.6 billion.

However, the market had a completely different take on the company’s valuation, even though tens of thousands of individual investors had reportedly bought shares ahead of its listing on the London Stock Exchange.

REASONS TO INVEST

We don’t know why they invested in the shares. Some, especially Deliveroo’s customers, probably thought it was a great company and a good investment since they already believed in and subscribed to its service.

In fact, the company had earmarked £50 million (US$68.7 million) worth of shares for its own customers. To make it even easier for them, the company said each customer could apply for up to 1,000 pounds of shares through the company’s own app.

Other buyers might have thought they could “stag” the shares. This is where traders hope to make a quick profit by selling the shares in the market at a price higher than the IPO price. They could have been emboldened following the successful IPO of Airbnb last December, where shares in the property-sharing app more than doubled on its debut on Nasdaq.

But the outcome for Deliveroo investors could not have been more different. Shares in the company that counts Amazon as one of its investors slumped by a quarter on its first day of trading. It wiped off almost £2 billion from its expected market capitalisation.

Today, the shares are worth £2.59 each, which values the company at £4.6 billion. This is now some £3 billion less than what its advisors had reckoned the company should be worth.

A DOSE OF REALITY

Rishi Sunak remained stoical, though, when he was pressed by a journalist during a television interview after Deliveroo’s IPO. He was asked if he was embarrassed by the collapse of the shares. The UK finance minister said: “Gosh no … shares go up, shares go down. We should celebrate success in this country”.

The British Chancellor of the Exchequer is right. Share prices can go down as well as up as anyone with a remote understanding of the stock market will tell you. The stock market is the place for investors to collectively discover the true value of a business, especially where IPOs are concerned.

That is because in an IPO, the thrill of being allowed to buy shares for the first time in exciting new companies can sometimes get the better of common sense. So, it is important for investors to know a few things about what IPOs are.

EXIT STRATEGY

In an IPO, shares in a private company are offered to the public through the issue of new stock. It is supposed to help a new company raise fresh capital from investors.

Before an IPO, only a relatively small number of shareholders, who include founders and professional investors, have provided money for the company to get started. But through the IPO, many more investors can participate in the success of the company.

The IPO could also provide a way for the company’s early investors to sell some of their shares and earn a return on their investment. So, the IPO could be seen as a convenient exit route for the company’s early backers. Consequently, it is in their interest to sell their shares at the highest possible price.

WHAT IS A FLOP?

Ironically, an IPO that has been described as “flop”, such as Deliveroo’s, should ultimately be seen as a success for the company. The IPO means that it has been able to sell new shares at inflated prices even if those shares didn’t meet initial valuations.

Conversely, a successful IPO where its shares soar at an initial listing could also mean the company or its advisors have badly undervalued the business. It could have sold the new shares at a much higher price and, in turn, raised more money for itself and its early backers.

By inference, therefore, a successful IPO is one where the share price does nothing on its first day. It means that the advisors have got the pricing of the shares just right - not too high or not too low.

BAD TIMING

In the case of Deliveroo, the market reckoned the shares were too expensive, which could be why they fell. But even though the shares collapsed on the first day, Deliveroo still managed to raise £1.5 billion, which it might not achieved if the shares had been priced lower.

In the aftermath of Deliveroo’s share-price collapse, there has been much hand-wringing over why the shares dropped.

Some have blamed the timing of the IPO, which coincided with many economies reopening after protracted lockdowns. Singapore, for instance, has allowed companies to bring back three-quarters of their staff to the office. The UK has allowed shops and restaurants to reopen.

With more economies returning to normalcy, there could be less demand for the services provided by food-delivery companies such as Deliveroo.

So, while turnover at Deliveroo has jumped nearly tenfold in the last five years, it is questionable whether the same pace of growth can be sustained. According to its chief executive Will Shu, Deliveroo’s business grew by more than 100 per cent in the UK and Ireland last year, as “the importance of online food delivery has grown hugely due to COVID-19”.

PROBLEMS GALORE

There are also issues about Deliveroo’s lack of profits. The company has made a loss every year since 2016 and was only profitable during the COVID-19 lockdown period.

Another bone of contention has been Mr Shu, who is also the company’s founder, retaining his 6.3 per cent stake in the company, but at the same time, having more than 50 per cent of voting rights.

This dual-class structure flies in the face of good corporate governance, where a single shareholder with a relatively small stake can have a disproportionately large say in the running of the company

Deliveroo’s dual-class structure also means that despite its hefty market valuation, it is ineligible for inclusion in any of the FTSE indices.

Had it been included in the FTSE 100 index, it would have meant that exchange-traded funds that track many of the UK stock market indices would have been forced to buy Deliveroo’s shares, regardless of whether they like the company.

TO EXPENSIVE BY HALF

Likely, the biggest reason for Deliveroo’s share price collapse was its market valuation. In May 2019, Amazon paid US$575 million for a 16 per cent stake in Deliveroo, which valued the company at US$3.5 billion.

That was two years ago. Yet, 24 months later, the company is suddenly reckoned by investment bankers to be worth nearly three times more at £7.6 billion. And over that time, the company has racked up even more losses. It just didn’t make sense.

The Deliveroo IPO debacle should not be seen as a barometer of future stock market listings.

If anything, it is a timely reality check for the market. Investors have a healthy appetite for companies that have a compelling growth story to tell. There is also plenty of liquidity to finance growing companies. But it won’t overpay for them.

 

[Shion]

https://www.channelnewsasia.com/business/deliveroo-doubles-orders-value-even-lockdowns-ease-2105586

 

[Shion]

DoorDash considered takeover of Deliveroo, Sunday Times says​

https://fortune.com/2022/03/06/doordash-considered-takeover-of-deliveroo-sunday-times-says/
U.S. food delivery company DoorDash Inc. considered a takeover bid for London-based Deliveroo Plc, but the two sides failed to reach an agreement, the Sunday Times newspaper reported.

America’s biggest meal-delivery service mulled a bid to further its plan to expand in Europe and met with Deliveroo over the summer, the Sunday Times reported. A tie up would have created a food-delivery company with 4 billion pounds ($5.2 billion) in sales, the paper said.

DoorDash, instead, bought Finnish food-delivery startup Wolt Enterprises Oy for about $8 billion. That became one of the most notable mergers of the rapidly consolidating food-delivery industry, which skyrocketed in popularity during the Covid-19 pandemic, though most of the companies are struggling to make a profit.

Deliveroo went public in London in March 2021 but its share price has slumped since the offering. Deliveroo closed at 106.8 pence on Friday, less than a third of the initial sale price of 390 pence.

 

[Shion]

Deliveroo reports rising annual losses as costs jump​

https://www.businesstimes.com.sg/consumer/deliveroo-reports-rising-annual-losses-as-costs-jump
[LONDON] International takeaway food app Deliveroo on Thursday (Mar 17) announced rising annual losses after costs rose by more than 1/3, offsetting a surge in home deliveries.

Loss after tax jumped 36 per cent to £308.5 million (S$551 million) last year compared with 2020, the British group said in a statement, adding the outlook was clouded by strong inflation and the Ukraine war.

Revenue surged 57 per cent to £1.8 billion as consumers continued to order from home despite easing Covid curbs and controversy over treatment of its riders.

French prosecutors at an ongoing trial in Paris are demanding that Deliveroo be fined the maximum 375,000 euros (US$415,000) for "undeclared labour".

The group Thursday added that its marketing and other investment costs, notably spending on technology, rocketed 75 per cent to almost £629 million.

Looking at 2022, founder and chief executive Will Shu cautioned over "headwinds due to inflationary pressures, the removal of economic stimulus and the broader geopolitical and economic impacts of the conflict in Ukraine".

But he forecast the company would reach breakeven between the second half of 2023 and first half of 2024.

Market watchers focused on Deliveroo's expected performance this year.

"In 2022 competition will remain very high in the traditional food and grocery delivery markets and this makes it unlikely that ROO will be able to reduce its high marketing expenditure in the near term," noted Dan Thomas, senior analyst at Third Bridge.

Deliveroo has enjoyed strong sales growth in a short space of time but faces questions over its sustainability, highlighted by its failed stock market debut which took place in London a year ago.

Its initial public offering was the capital's biggest stock market launch for a decade, valuing the group at £7.6 billion.

But its share price tumbled on launch day by almost a third from the IPO price of £3.90 as investors questioned Deliveroo's treatment of its self-employed riders.

Deliveroo's share price was up nearly 5 per cent at £1.22 in early London trading following the earnings update.

"Deliveroo is riding deeper into the red, as it shifts gears to try to carry off a bigger slice of the takeaway market," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

At the same time, "it's making a huge effort to pedal into new markets to try and widen its reach of riders across the UK and that's encouraged investors". AFP

 

[fortunehunter]

Deliveroo? Making of grab stocks ah lol

 

[Shion]

Deliveroo sees room to grow grocery, food delivery in Singapore despite competition​

https://www.businesstimes.com.sg/st...y-food-delivery-singapore-despite-competition

 

[Cookie Muncher]

Dividend is food purchase discount code?

 

[Shion]

DoorDash to buy Deliveroo for $5 billion to take on competition​

https://www.straitstimes.com/busine...mbine-in-5-billion-deal-for-more-market-share

Bengaluru – US meal delivery firm DoorDash will buy British rival Deliveroo for £2.9 billion (S$5 billion), the companies said on May 6, as they look to expand their reach and take on competition.

The companies rekindled talks in April after DoorDash approached Deliveroo with a 180 pence per share proposal, which was confirmed on May 6 as the final offer.

Previous negotiations had ended in disagreement over Deliveroo’s valuation, Reuters reported in 2024.

DoorDash, which controls two-thirds of the restaurant delivery market in the US, will expand its reach to more than 40 countries with the acquisition, it said.

The two companies combined had a gross order value of about US$90 billion (S$116.2 billion) in 2024 and have a combined 50 million monthly active users.

The move is the latest example of consolidation in the industry, after Dutch technology investor Prosus in February agreed to buy Amsterdam’s Just Eat Takeaway.com. Prosus has investments in several food delivery platforms, including full ownership of iFood and a 28 per cent stake in Delivery Hero.

Food delivery companies are being pushed to combine after rapid acceleration during the Covid-19 pandemic lost steam in the years following. A new generation of global players with deep pockets is now competing for customers across borders.

DoorDash, which provides a restaurant delivery service through a mobile application, said it will not increase its offer, but reserved a right to do so if a third party emerged with a competing offer for Deliveroo.

Deliveroo has received undertakings of support from investors holding about 15.4 per cent of shares, it said, including from founder and chief executive Will Shu, Greenoaks and DST Global.

However, analysts from investment bank Panmure Liberum highlighted “the notable absence” of Deliveroo’s largest investor, Amazon, from this list, adding that they still see Amazon as the most likely counter-bidder.

Amazon, which has a 14.4 per cent stake in Deliveroo, did not immediately respond to a Reuters request for comment.

The acquisition will help DoorDash grow its market share in Europe, competing against Just Eat and Uber Eats.

Britain and Ireland are Deliveroo’s largest market, accounting for 62 per cent of the value of its orders in its latest quarter.

Deliveroo’s other large markets include France and Italy, but the deal is not expected to face regulatory hurdles as DoorDash has virtually no presence in Deliveroo’s 10 markets, a source told Reuters in April.

Deliveroo shares dropped in March after projecting earnings that fell far below analysts’ estimates, and the company exited the Hong Kong market, following disappointing sales and mounting competition. REUTERS, BLOOMBERG