Sam is a trader and one of our lead stock analysts at AskTraders. After starting his career predominantly in the forex markets, Sam now focuses on gold and stocks with a preference for macroeconomic analysis.
It looks like it will be a blockbuster year for London IPO's, and there is soon set to be another with restaurant and grocery delivery app Deliveroo to be the latest company to list on the London Stock Exchange. So let's take a look at all things Deliveroo ahead of its expected flotation in April…
Deliveroo is a London -based online food delivery platform intended to help in ordering restaurant meals. The company was founded in 2012 by CEO Will Shu and Greg Orlowski and has around 2,000 employees.
Along with the UK, Deliveroo also has operations in 200 cities in Asia and across Europe.
They have over 140,000 restaurants on the app, with more than 6 million people ordering each month through the platform.
2020 was a stellar year for the company, with the lockdown restrictions shifting more customers onto its platform.
As mentioned, the company lost $223.7 million in 2020 compared to a £317.3 million loss in 2019. However, demand surged, with gross transaction value rising 64.3% from £2.5 billion in 2019 to £4.1 billion in 2020.
Underlying gross profit grew by 89.5% from £188.7 million to £357.5 million.
Despite the losses in 2020, the company recently secured $180 million in funding from investors, led by US investors Durable Capital Partners and Fidelity Management & Research, along with minority shareholder Amazon, valuing the company at $7 billion.
Amazon took a 16% stake in the business for $575 million in May 2019, and despite objections from competitors Just Eat Takeaway and Domino’s Pizza, Britain’s competition regulator approved the purchase.
Since the initial Amazon investment, Deliveroo’s finances have improved, cutting costs and expanding its footprint in the online delivery industry.
Deliveroo looks set for a high valuation, with analysts estimating it could be between £6 billion £8 billion.
Deliveroo expects to use the proceeds raised from the IPO to expand to new locations and develop new tools.
With lockdown restrictions starting to ease, there may be issues ahead as demand drops off from the pandemic highs, but the company has the backing of experienced stakeholders and looks set to be London’s biggest listing this year.
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